- within Finance and Banking topic(s)
- with Finance and Tax Executives
- in European Union
- in European Union
- in European Union
- in European Union
- in European Union
- with readers working within the Banking & Credit, Healthcare and Securities & Investment industries
1. Bank regulation
1.1 PRUDENTIAL REGULATION
a) General
(i) EU EBA: Report on white labelling
Status: Final
The EBA published a report on white labelling, accompanied by a fact sheet. In the report, the EBA considers the use of white labelling as a business model by the firms that are under its mandate, including credit institutions, emoney institutions, payment institutions, non-bank issuers of asset-referenced tokens, and non-bank lenders. The report defines white labelling as a business model in which a financial institution (the provider) enters into an agreement with another entity (the partner, who may or may not be a financial institution) to distribute and offer one or more financial products and services under the partner's own brand only. The EBA finds that white labelling is being widely used, with 35% of surveyed banks employing the model to distribute a broad range of financial products and services, both domestically and cross-border, including account and payment services, credit provisioning and open banking services.
The EBA identifies several benefits of white labelling such as cost efficiency and enhancing financial inclusion but also flags key risks including potential mis-selling, fraud risk, weaknesses in anti-money laundering and countering the financing of terrorism controls, and a lack of transparency towards consumers as to precisely with whom they are contracting. While the EBA does not propose amendments to EU law, it has identified a need for supervisory convergence actions which the EBA plans to take forward in 2026, in particular as regards the regulatory qualification of the arrangements between the parties and the assessment and identification of emerging risks. Regarding consumer protection, the EBA intends to focus on appropriate measures to facilitate awareness by consumers of the key elements relating to white labelling. In addition, the EBA will continue assessing the evolution of banks' engagement in white labelling via its regular Risk Assessment Questionnaire (RAQ) and wider innovation monitoring.
Date of publication: 14/10/2025
(ii) International
BCBS: Basel III monitoring report
Status: Final
The BCBS published the latest update on the Basel III monitoring report. The report sets out the impact of the Basel III framework, including the December 2017 finalisation of the Basel III reforms and the January 2019 finalisation of the market risk framework. A web-based version of the report with interactive graphs is available on the highlights page.
Date of publication: 23/10/2025
FSB: Interim report on G20 implementation monitoring review
Status: Final
The FSB published a letter from its Chair, Andrew Bailey, to G20 Finance Ministers and Central Bank Governors ahead of their meeting on 15-16 October, alongside an interim report from the G20 strategic review of the FSB implementation monitoring work. In the letter, Mr Bailey highlights the importance of global standards and cooperation in preventing crises and supporting sustained growth. The letter also emphasises the urgent need for full, timely and consistent implementation of financial reforms, warning that incomplete efforts leave the global financial system vulnerable to shocks. To address this, the FSB confirms it will enhance its surveillance of vulnerabilities in the financial system and pivot from policy development to monitoring and facilitating the implementation of agreed reforms.
The accompanying interim report provides an initial assessment of progress across several key reform areas including too-big-to-fail policy measures, non-bank financial intermediation, over-the-counter derivatives market reforms, Basel III and crypto-asset markets and activities. The initial assessment of implementation status shows that full, timely and consistent implementation has not been completely achieved. This is despite the active programme of implementation monitoring by the FSB and standard-setting bodies. The next phase of the G20 strategic implementation monitoring review will reflect on why implementation gaps exist. The final report will make specific recommendations to strengthen the FSB's monitoring and implementation processes.
Date of publication: 13/10/2025
BCBS: Report on further progress on the Basel III implementation
Status: Final
The BCBS published a report on further progress on the Basel III implementation. It set out that over the past 12 months, the final Basel III standards came into effect in more than 40% of the Basel Committee's 27 member jurisdictions. The report also explained that the revised credit risk and operational risk standards as well as the output floor are now in effect in around 80% of member jurisdictions. The Committee will continue to closely monitor and assess the full and consistent implementation of Basel III standards.
Date of publication: 03/10/2025
b) Solvency/Own funds issues
(i) Germany
BaFin: Countercyclical capital buffer regarding indicator values, time series and indicator description (Antizyklischer Kapitalpuffer zu Indikatoren, Zeitreihen und Erläuterungen)
Status: Final
BaFin published an updated Excel spreadsheet on the countercyclical capital buffer, including indicator values, time series and an indicator description, in German and English translations.
Date of publication: 30/10/2025
(ii) EU
EC: Communication on Guidance concerning the treatment of equity exposures incurred under legislative programmes according to Article 133(5) CRR
Status: Final
The EC adopted a communication providing guidance clarifying how banks can benefit from preferential prudential treatment under Article 133(5) CRR when investing in equity through legislative programmes, which are structured public investment schemes established under EU or national law. These programmes, which combine public support (e.g. guarantees or co-investment) with private funding and oversight mechanisms, target strategic sectors such as clean technologies, digital innovation and defence. The guidance promotes consistent application across the Single Market, enabling banks to apply lower capital charges to qualifying exposures, reflecting their reduced risk profile. This initiative supports financial stability while enhancing access to equity financing for EU companies and advancing the EC's broader goals under the Savings and Investments Union (SIU), including capital market integration and competitiveness. A public register of eligible legislative programmes has been published, as well as a website with questions and answers on legislative programmes under Article 133(5) CRR.
Date of publication: 29/10/2025
EBA: Final report on draft RTS on CVA risk of SFTs under Article 382(6) CRR
Status: Final
The EBA published a final report on the draft RTS under Article 382(6) CRR, as amended by CRR3. The RTS establish a quantitative framework for assessing the materiality of credit valuation adjustment (CVA) risk exposures arising from fair-valued securities financing transactions (SFTs). Following feedback to the July 2024 consultation, the EBA retained its proposed quantitative approach to assessing materiality, opting for a ratio-based threshold of 5% to determine whether such transactions should be included in CVA capital requirements. The final RTS also uphold quarterly assessments aligned with COREP reporting cycles and clarify that the CVA capital requirement metric, rather than broader own funds or exposure values, should be used for the materiality test.
A notable change has been made to the proposed stabilisation mechanism. While it was initially proposed that institutions include fair-valued SFTs in scope if any of the last four quarterly ratios exceeded the materiality threshold, the final RTS now require a point-in-time assessment based solely on the current reference date. This revision ensures that CVA risk is capitalised only when present, aligning more closely with the Level 1 text and avoiding unnecessary capital requirements based on past exposures. The draft RTS will be submitted to the EC for adoption following which they will be subject to scrutiny by the EP and Council of the EU before publication in OJ.
Date of publication: 29/10/2025
EC: Commission Delegated Regulation (EU) .../... amending Delegated Regulation (EU) 2015/35 as regards technical provisions, long-term guarantee measures, own funds, equity risk, spread risk on securitisation positions, other standard formula capital requirements, reporting and disclosure, proportionality and group solvency
Status: Adopted by the EC
The EC adopted a Commission Delegated Regulation amending Delegated Regulation (EU) 2015/35 as regards technical provisions, long-term guarantee measures, own funds, equity risk, spread risk on securitisation positions, other standard formula capital requirements, reporting and disclosure, proportionality and group solvency.
Date of publication: 29/10/2025
EBA: Two Q&As under CRR
Status: Final
The EBA published two Q&A under the CRR: (i) 2025_7363 addresses how exposures to institutions should be treated under the Credit Risk Standardised approach, if such institutions have been waived of individual capital requirements under Article 7 of the CRR; and (ii) 2025_7470 addresses the eligibility as collateral under Article 207(2) of the CRR of secured notes designed specifically to remove any material positive correlation between the value of the note and the credit quality of its issuer.
Date of publication: 24/10/2025
Commission Delegated Regulation (EU) 2025/1311 supplementing the CRR with regard to RTS specifying the conditions for assessing the materiality of extensions of, and changes to, the use of alternative internal models, and changes to the subset of the modellable risk factors
Status: Published in the OJ
Date of entry into force: 03/11/2025
Date of application: 03/11/2025
Commission Delegated Regulation (EU) 2025/1311 supplementing the CRR was published in the OJ. The Delegated Regulation sets out RTS specifying the materiality assessment of extensions, and changes to, the use of alternative internal models, and changes to the subset of modellable risk factors. The RTS reflect a mandate in Article 325az(8) of the CRR. The Delegated Regulation also sets out detailed documentation requirements and clarifies supervisory expectations for model governance, validation and IT infrastructure changes.
Date of publication: 14/10/2025
Commission Delegated Regulation (EU) 2025/1265 supplementing the CRR with regard to RTS specifying the method for identifying the main risk driver of a position and for determining whether a transaction represents a long or a short position as referred to in Articles 94(3), 273a(3) and 325a(2)
Status: Published in the OJ
Date of entry into force: 03/11/2025
Commission Delegated Regulation (EU) 2025/1265 supplementing the CRR was published in the OJ. The Delegated Regulation, adopted in July, sets out RTS specifying the method for identifying the main risk driver of a position and for determining whether a transaction represents a long or short position as referred to in Articles 94(3), 273a(3), and 325a(2) of the CRR.
Date of publication: 14/10/2025
(iii) International
BCBS: Technical amendment on hedging of counterparty credit risk exposures
Status: Final
The BCBS published a final technical amendment to the Basel framework, clarifying the treatment of guarantees and credit derivatives used to hedge counterparty credit risk (CCR) from derivative exposures. The technical amendment, revised following consultation feedback, applies specifically to a bank's use of fixed or capped protection and excludes securities financing transactions (SFTs) and securitisation exposures. Amendments have been made to the credit risk and CCR standards to align the treatment of guarantees and credit derivative protection with that of eligible collateral under the CCR framework. These changes aim to clarify how fixed or capped protection should be reflected in exposure calculations and address inconsistencies in the application of the framework. As a technical amendment, it does not constitute a substantial change to the standards but resolves ambiguities that could not be addressed under the existing rules. Supervisors and the BCBS will monitor implementation and potential circumvention strategies, with the possibility of extending similar treatment to SFTs and securitisations if necessary. BCBS members have agreed to implement the amendment as soon as practical and within three years at the latest.
Date of publication: 28/10/2025
To view the full article clickhere
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
