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cation between the CAs and auditors should
contribute to fostering financial stability, and
the safety and soundness of the banking sys-
tem, by facilitating the task of supervision of
credit institutions.
The EBA continued to contribute to the suc-
cessful implementation of the Capital Market
Union reform by issuing final guidelines on
implicit support for
securitisation transactions
in October 2016 and publishing a report in De-
cember 2016, with recommendations on how to
harmonise the
covered bond
framework in the
EU. The objective of these guidelines is to clari-
fy what constitutes arm’s length conditions and
to specify when a transaction is not structured
to provide support for securitisations.
The EBA supported the Commission in the
preparation of its legislative proposal to
amend the rules on
capital requirements
and the resolution framework, which was is-
sued on 23 November 2016. The purpose of
the latest proposals is to implement the most
recent international regulatory reforms such
as those arising from the Fundamental Review
of the Trading Book (FRTB) or the total loss
absorption capacity (TLAC) requirement in EU
law. In particular, the proposal covers market
risk, counterparty credit risk (CCR), the LR,
the NSFR and elements of the Bank Recovery
and Resolution Directive (BRRD).
Developing resolution policy and
promoting common approaches to the
resolution of failing financial institutions
After a relatively slow start in 2015, when only
a small number of
resolution colleges
were
held, activity accelerated in 2016. EBA staff
attended resolution colleges for 25 major
EU banking groups during the year. Where
those institutions were global systemically
important institutions (G-SIIs), EBA staff also
attended the meetings held for such institu-
tions. The focus of attention for the EBA dur-
ing the year was on the efficient, effective and
consistent functioning of the colleges.
The regulatory products developed by the EBA
in 2016 cover a wide range of resolution mat-
ters. The EBA undertook substantial work in
the area of the
minimum requirement for
own funds and eligible liabilities (MREL)
. In
addition to the reports on the design and im-
plementation of MREL, the EBA developed
and launched a public consultation on the im-
plementing technical standards (ITS) on how
resolution authorities should report MREL de-
cisions to the EBA.
The EBA has also issued guidelines on confi-
dentiality aimed at promoting the convergence
of supervisory and resolution practices on the
disclosure of confidential information collected
for the purposes of the BRRD. The EBA has also
initiated the review and transformation of its
Guidelines on the application of
simplified obli-
gations
into the RTS, with a view to further har-
monising supervisory and resolution practices
with respect to the methodology and criteria for
the application of simplified obligations.
Following the entry into force of the new De-
posit Guarantee Schemes Directive (DGSD) in
July 2015, the EBA further helped to develop
the rules for strengthening the resilience
of
deposit guarantee schemes (DGSs)
and
improving depositors’ access to compensa-
tion, including in cross-border bank failures.
In 2016, the EBA published its own-initiative
Guidelines on cooperation agreements be-
tween DGSs as well as Guidelines on stress
tests of DGSs.
In October 2016, the EBA published a report
on the reference point for the target level of
national
resolution-financing arrangements
.
The report recommended that measures
based on total liabilities, and ‘total liabilities
excluding own funds less covered deposits’ in
particular, are the most appropriate target-
level basis for resolution-financing arrange-
ments (instead of the current reference basis
of covered deposits).