Page 71 - EBA 2015.1815 Annual report 2014 web 2

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2 0 1 4 a n n u a l r e p o r t
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Work on shadow banking
In 2014, the EBA carried out a comprehensive
study of the interpretation of the term ‘credit
institution’ which is used in all key pieces of the
Union banking legislation, including the CRD IV
and the CRR, the BRRD and the SSM and SRM
Regulations. The EBA also assessed the pru-
dential treatment of those entities established
in the Union which carry on credit intermedia-
tion, but are not ‘credit institutions’ or other
specific forms of financial institution (i.e. those
entities which are commonly known as shadow
banks), to identify which, if any, prudential re-
quirements are applied to such bodies under
national law. The results of the study are set out
in the EBA’s Opinion and Report on the perim-
eter of credit institutions. (
23
)
(
23
) Opinion and Report on the perimeter of credit
institutions:
.
Box 7 — Macro-prudential measures
On 1 April 2014, the EBA also received a notification (according to Article 458
CRR) from the National Bank of Belgium (NBB) of its intention to make use of
stricter national measures for tackling macro-prudential and systemic risks
in the country’s mortgage markets. The proposed measure, that was part of a
broader set of measures, included an increase to risk weights for retail expo-
sures secured by Belgian residential immovable property for Belgian IRB banks
by an add-on of five percentage points. The EBA did not object to the adoption
of these measures, since they would increase the resilience of the Belgian
banking sector, however, the EBA identified a number of issues to which it drew
the Commission’s attention in the form of an EBA Opinion, including the need
for an evaluation of the adequacy of IRB models applied by credit institutions
and the potential to apply institution-specific supervisory measures to avoid
constant add-ons to risk weights that could penalise banks with more con-
servative credit standards or models. The EBA Opinion was submitted to the
Council, the Commission and the NBB on 30 April 2014.
Ongoing activity
In 2015, the EBA is planning to undertake a range of other
work in relation to shadow banking, including the prepa-
ration of guidelines on exposure limits to shadow banking
entities under Article 395(2) CRR. For the purposes of
these guidelines the EBA has had to prescribe a definition
of ‘shadow banking entities’ and proposes an approach in
line with the EBA’s Opinion and Report on the perimeter
of credit institutions. The EBA is also contributing to work
streams of the ECB and the ESRB in relation to shadow
banking and to wider international work streams, in
particular the BCBS Task Force on the scope of regulatory
consolidation.