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
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dossier | COM(2025)146 - Amendment of Regulation (EU) No 575/2013 on prudential requirements for credit institutions as regards requirements for ... |
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document | COM(2025)146 ![]() |
date | June 17, 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 %. However, Article 510(8) of Regulation (EU) No 575/2013 provides that, by 28 June 2025, those funding factors are to be raised to 10 %, 15 % and 15 %, respectively. That deferred raise aimed to give 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 bond markets. |
(3) | Under Article 510(6) of Regulation (EU) No 575/2013, the European Supervisory Authority (European Banking Authority) (EBA) established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council (6), was mandated to assess the appropriateness of the treatment of the stable funding required to cover the funding risk linked to securities financing transactions (SFTs) and to unsecured transactions with financial customers where those SFTs or unsecured transactions have a residual maturity of less than six months. In line with that mandate, EBA delivered a report on specific aspects of the NSFR framework on 16 January 2024. That report concluded that raising the required stable funding factors applying to the transactions referred to in Article 428r(1), point (g), Article 428s(1), point (b), and Article 428v, point (a), of Regulation (EU) No 575/2013 would have a negligible impact on the NSFR levels of credit institutions. However, that report did not assess the broader dimension or spillover effects regarding the liquidity of the sovereign debt markets and the effects on sovereign bond markets. Therefore, the considerations justifying the deferral of the raising of required stable funding factors, as provided for in Article 510(8) of Regulation (EU) No 575/2013, continue to 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 factor levels for SFTs that are identical to those that are currently applicable under Regulation (EU) No 575/2013. In that context, given the intense international competition in the SFT market, raising the required stable funding factors by 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 for unsecured transactions with financial customers, where such transactions have a residual maturity of less than six months, should be made permanent. |
(6) | To ensure sufficient monitoring of interactions between the stable funding requirements and the market liquidity of assets received as collateral in SFTs and of unsecured transactions with financial customers, where such transactions have a residual maturity of less than six months, including when collateralised by sovereign debt, the funding risk for credit institutions, and possible international developments in that area, EBA should report to the Commission every five years on the appropriateness of those stable funding requirements. |
(7) | Temporarily discontinuing the prudential treatment for monies due from SFTs and for unsecured transactions with financial customers, with a residual maturity of less than six months, 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. Therefore, to ensure the continuity of that prudential treatment, this amending Regulation should apply from 29 June 2025. |
(8) | Regulation (EU) No 575/2013 should therefore be amended accordingly, |