Considerations on COM(2025)146 - Amendment of Regulation (EU) No 575/2013 on prudential requirements for credit institutions as regards requirements for securities financing transactions under the net stable funding ratio - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2025)146 - Amendment of Regulation (EU) No 575/2013 on prudential requirements for credit institutions as regards requirements for ... |
|---|---|
| document | COM(2025)146  |
| date | March 31, 2025 |
(2) Article 428r(1), point (g), Article 428s(1), point (b), and Article 428v, point (a), of Regulation (EU) No 575/2013 currently provide for the stable funding factors for monies due from financing transactions with financial customers, where those transactions have a residual maturity of less than six months. Those funding factors are, depending on the financing transaction concerned, 0%, 5% or 10%. Article 510(8) of Regulation (EU) No 575/2013, however, provides for a raise, by 28 June 2025, of those funding factors to 10%, 15% and 15%, respectively. That deferred raise aimed at giving credit institutions sufficient time to gradually adapt to a more conservative calibration and to assess whether that calibration was appropriate. In addition to that deferred raise, other adjustments were adopted to ensure that the introduction of the NSFR requirement did not disrupt the liquidity of the related collateral markets, including sovereign bonds markets.
(3) Under Article 510(6), of Regulation (EU) No 575/2013, the European Banking Authority (EBA) was mandated to assess the appropriateness of the treatment of the stable funding required to cover the funding risk linked to SFTs and unsecured transactions with financial customers where those SFTs and unsecured transactions have a residual maturity of less than six months. In line with that mandate, the EBA delivered a report on specific aspects of the NSFR on 16 January 2024 15 That report concluded that a raise of the funding factors, as provided for in Article 510(8) of Regulation (EU) No 575/2013, would have a negligible impact on the levels of NSFRs of institutions. However, the report does not assess the broader dimension and spillover effects on the liquidity of the sovereign debt and bonds markets. The considerations that led to the deferral of that raise still prevail. In particular, as the bulk of SFTs are collateralised by sovereign debt instruments, a raise in the related required stable funding could reduce the liquidity in the markets concerned. That could, in turn, risk creating additional funding costs for Member States and altering monetary policy transmission mechanisms.
(4) In addition, other BCBS member jurisdictions have set required stable funding levels for SFTs that are identical to those that are currently applicable. In that context, given the intense international competition in the SFT market, a raise of the funding factors on 28 June 2025 would create an uneven international playing field that would be detrimental to Union financial markets.
(5) To avoid those unintended consequences, the current stable funding factors for SFTs and unsecured transactions with financial customers, where such transactions have a residual maturity of less than six months, as laid down in Article 428r(1), point (g), Article 428s(1), point (b), and Article 428v, point (a), of Regulation (EU) No 575/2013, should be made permanent.
(6) To ensure sufficient monitoring of the interactions with the market liquidity of assets received as collateral in SFTs and unsecured transactions with financial customers, where such transactions have a residual maturity of less than six months, including when collateralized by sovereign debt, the funding risk for credit institutions, and possible international developments in that area, the EBA should report to the European Commission every five years on the appropriateness of those stable funding requirements.
(7) To ensure the continuity of the prudential treatment for monies due from SFTs and for unsecured transactions, with financial customers, with a residual maturity of less than six months, as specified under Article 428r(1), point (g), Article 428s(1), point (b), and Article 428v, point (a), of Regulation (EU) No 575/2013, the proposed Regulation should apply from 29 June 2025. Temporarily discontinuing the treatment would create legal uncertainty for market participants and undue administrative and financial burden for the Union banking sector in general that could be mitigated by clearly setting the expected date of application of the provisions concerned.
(8) Regulation (EU) No 575/2013 should therefore be amended accordingly.