Regulation (EU) 2022/2036 amending Regulation (EU) No 575/2013 and Directive 2014/59/EU as regards the prudential treatment of global systemically important institutions with a multiple-point-of-entry resolution strategy and methods for the indirect subscription of instruments eligible for meeting the minimum requirement for own funds and eligible liabilities

Summary:

Regulation (EU) 2022/2036 - formally adopted by the co-legislators on 19 October 2022 - introducing amendments to Regulation (EU) No 575/2013 and Directive 2014/59/EU concerning the prudential treatment of global systemically important institution groups with a multiple point of entry resolution strategy and a methodology for the indirect subscription of instruments eligible for meeting the minimum requirement for own funds and eligible liabilities. This is a text with EEA relevance.

Further information:

Regulation (EU) No 575/2013 - also known as the Capital Requirements Regulation (CRR) - established a single set of harmonised prudential rules, which banks throughout the European Union (EU) must respect. Directive 2014/59/EU established common rules in the European Union (EU) for the recovery and restructuring of failing banks.

This Regulation amends the EU's bank resolution framework by:

• incorporating a dedicated treatment for the indirect subscription of instruments eligible for internal minimum requirement for own funds and eligible liabilities (MREL);
• further aligning the treatment of global systemically important institution (G-SII) groups with a Multiple Point of Entry (MPE) resolution strategy with the treatment outlined in the Financial Stability Board's (FSB) international Total Loss-absorbing Capacity Term Sheet (the TLAC standard)

The so-called Daisy Chain proposal was put forward by the European Commission on 27 October 2021, as part of the so-called 2021 Banking Package. Member State representatives adopted a general approach for this file on behalf of the Council of the European Union on 21 December 2021. The European Parliament adopted its negotiating position in February 2022. An informal agreement between the co-legislators on a compromise text for this file was reached on 28 April. This was formally endorsed by the Parliament on 13 September and by the Council on 4 October. The Act was signed by the co-legislators on 19 October 2022 and published in the Official Journal on 25 October 2022.

Official

EUR-LEX: COM(2021)665: Proposal for a Regulation amending Regulation (EU) No 575/2013 and Directive 2014/59/EU as regards the prudential treatment of global systemically important institution groups with a multiple point of entry resolution strategy and a methodology for the indirect subscription of instruments eligible for meeting the minimum requirement for own funds and eligible liabilities https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2021:665:FIN

European Parliament: Legislative Observatory: Procedure File for Proposal on Amendments to the Capital Requirements Regulation in the area of resolution (“daisy chain” proposal) (2021/0343(COD)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2021/0343(COD)

European Parliament: Legislative Train Schedule: Review of the Capital Requirements Regulation in the area of Resolution https://www.europarl.europa.eu/legislative-train/theme-an-economy-that-works-for-people/file-crd-crr-review-3

European Commission: Press Release, 27/10/2021: Banking Package 2021: new EU rules to strengthen banks' resilience and better prepare for the future https://ec.europa.eu/commission/presscorner/detail/en/ip_21_5401

European Commission: Questions and Answers on the Banking Package 2021 (27 October 2021) https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_5386

Council of the European Union: Press Release, 21/12/2021: Daisy Chain: member states ready to negotiate with European Parliament https://www.consilium.europa.eu/en/press/press-releases/2021/12/21/daisy-chain-member-states-ready-to-negotiate-with-european-parliament/

Council of the European Union: Press Release, 28/04/2022: Daisy chains: provisional agreement on a revised bank resolution framework https://www.consilium.europa.eu/en/press/press-releases/2022/04/28/daisy-chain-provisional-agreement-on-a-revised-bank-resolution-framework-which-will-help-ensure-that-banks-remain-resilient-and-capable-of-withstanding-future-shocks/

Council of the European Union: Press Release, 04/10/2022: Daisy chains: Council adopted a revised bank resolution framework https://www.consilium.europa.eu/en/press/press-releases/2022/10/04/daisy-chains-council-adopted-a-revised-bank-resolution-framework/

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