Report on market developments potentially requiring the use of Article 459 CRR

Article 459 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (the Capital Requirements Regulation) provides that the Commission, assisted by the European Systemic Risk Board (ESRB), has to submit a report, at least on an annual basis, to the European Parliament and the Council on market developments potentially requiring the use of this Article.

Pursuant to Article 459 CRR, the Commission may impose, for a period of one year, stricter requirements concerning the level of banks' own funds, large exposures, or public disclosure, under specific conditions, in particular upon the recommendation or the opinion of the ESRB or the European Banking Authority (EBA). The required conditions are that these measures are necessary to address changes in the intensity of micro-prudential and macro-prudential risks which arise from market developments in the Union or outside the Union affecting all Member States, and that the instruments of the CRR/CRDIV are not sufficient to address these risks.

The European Commission has not yet seen any circumstances that would warrant the use of Article 459 CRR, considering in particular that this Article allows only for tightening measures, the priority of the other CRR/CRDIV instruments and the fact that measures under Article 459 CRR may only be imposed where the respective market developments affect all Member States. In accordance with this assessment, neither the ESRB nor the EBA have recommended to the Commission to take action under Article 459 CRR at this stage.

The Commission will continue to monitor in close cooperation with the ESRB relevant market developments in the Union or outside the Union potentially requiring the use of this Article.