Regulation 2019/2160 - Amendment of Regulation (EU) No 575/2013 as regards exposures in the form of covered bonds - Main contents
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official title
Regulation (EU) 2019/2160 of the European Parliament and of the Council of 27 November 2019 amending Regulation (EU) No 575/2013 as regards exposures in the form of covered bonds| Legal instrument | Regulation |
|---|---|
| Number legal act | Regulation 2019/2160 |
| Original proposal | COM(2018)93  |
| CELEX number i | 32019R2160 |
| Document | 27-11-2019; Date of signature |
|---|---|
| Publication in Official Journal | 18-12-2019; OJ L 328 p. 1-6 |
| Signature | 27-11-2019 |
| Effect | 07-01-2020; Entry into force Date pub. +20 See Art 2 08-07-2022; Application See Art 2 |
| End of validity | 31-12-9999 |
18.12.2019 |
EN |
Official Journal of the European Union |
L 328/1 |
REGULATION (EU) 2019/2160 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 27 November 2019
amending Regulation (EU) No 575/2013 as regards exposures in the form of covered bonds
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Central Bank (1),
Having regard to the opinion of the European Economic and Social Committee (2),
Acting in accordance with the ordinary legislative procedure (3),
Whereas:
(1) |
Article 129 of Regulation (EU) No 575/2013 of the European Parliament and of the Council (4) grants preferential treatment to covered bonds under certain conditions. Directive (EU) 2019/2162 of the European Parliament and of the Council (5) specifies the core elements of covered bonds and provides for a common definition of covered bonds. |
(2) |
On 20 December 2013, the Commission requested the European Supervisory Authority (European Banking Authority) (‘EBA’), established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council (6), to provide an opinion on the appropriateness of the risk weights for covered bonds set out in Article 129 of Regulation (EU) No 575/2013. According to EBA’s opinion of 1 July 2014, the preferential risk weight treatment provided for in Regulation (EU) No 575/2013 constitutes, in principle, appropriate prudential treatment. However, EBA recommended that further consideration be given to complementing the eligibility requirements for the preferential risk weight treatment to cover, at a minimum, the areas of liquidity risk mitigation and overcollateralisation, the role of competent authorities, and the further development of existing requirements on disclosure to investors. |
(3) |
In the light of EBA’s opinion, it is appropriate to adopt additional requirements for covered bonds, thereby strengthening the quality of covered bonds eligible for favourable capital treatment under Regulation (EU) No 575/2013. |
(4) |
Competent authorities may partially waive the application of the requirement for exposures to credit institutions within the cover pool to qualify for credit quality step 1 and allow exposures of up to a maximum of 10 % of the nominal amount of outstanding covered bonds of the issuing institution to qualify for credit quality step 2 instead. However, such a partial waiver applies only after prior consultation of EBA and only where significant potential concentration problems resulting from the application of the credit quality step 1 requirement in the Member States concerned can be documented. As the requirements for exposures to qualify for credit quality step 1 as made available by external credit assessment institutions have become increasingly difficult to comply with in most Member States, both within and outside the euro area, the application of such a partial waiver was considered to be necessary by those Member States which host the largest covered bonds markets. To simplify the use of exposures to credit institutions as collateral for covered bonds, and in order to address potential concentration problems, it is necessary to amend Regulation (EU) No 575/2013 by establishing a rule allowing exposures to credit institutions up to a maximum of 10 % of the nominal amount of outstanding covered bonds of the issuing institution to qualify for credit quality step 2 instead of credit quality step 1 without a requirement to consult EBA. It is necessary to allow the use of credit quality step 3 for short‐term deposits and derivatives in specific Member... |
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