Amendments to the Capital Requirements Regulation

UNIFE, the European Association of the Rail Supply Industry, shares its views and concerns on some concrete aspects of the new proposed Regulation, namely on the Credit Conversion Factor (CCF) for Technical Guarantees and Effective Maturity recognition for Trade Finance.

BAFT (The Bankers Association for Finance and Trade) welcomes the opportunity to comment on the “Banking Package” released on 27 October 2021 which includes a legislative proposal COM(2021)664, intended to amend Regulation (EU) No 575/2013 (Capital Requirements Regulation, CRR).

EAA Response to the European Commission’s Public Consultation on “Implementing the final Basel III Reforms in the EU” The European AVM Alliance AISBL (EAA) is a European federation consisting of leading providers of Automated Valuation Models (AVMs).

WWF welcomes the European Commission proposal to complete implementation of the Basel III agreement in the European Union, a helpful step to ensure better financial stability after the financial crisis. The timetable proposed by the Commission means that the EU will add another two years to the Basel timeline and plans to fully apply the international agreement by 2030, which means 23 years will have passed since…

Airbus welcomes the opportunity to comment on the proposed regulation, and would like to provide feedback on the considered strengthening of the applicable terms to trade finance instruments, particularly to technical guarantees.

The International Securities Lending Association (ISLA) welcomes the finalisation of the Basel III reforms in the European Union to further contribute to future financial stability and assist in the steady crisis recovery, post COVID-19.

The finalisation of the Basel III accords should recognise the specificities of the EU banking sector. It should pragmatically apply the output floor at the consolidated level. Banks play a key role in infrastructure financing in the EU, while in the US infrastructure projects are mainly financed by capital markets.

Dear, I work in the treasury department of a large multinational active in the construction sector, and I believe that the regulation may have severe consequences on our business. As an international company active in the building sector, we require access to trade finance products when we import merchandise and when we secure international contracts (Letters of Credit, SBLC, Technical guarantees such as bid bonds…

AFTE is the French Association of Corporate Treasurers representing the corporate treasury activities of non-financial companies or corporates (“NFCs”) including Small to Medium Sized Enterprises (“SMEs”). AFTE welcomes the effort of the European Commission to implement the Basel 3 text and understands the importance of a robust European (“EU”) financial system to ensure financial stability and economic growth.

Subject: Request to amend the Capital Requirement Regulation regarding Non-performing Exposure and Export Credit The 2nd Capital Requirement Regulation (CRR II) provisions on non-performing exposures (NPEs) requires banks to provision their non-performing loans (NPLs). An exception is made for NPLs guaranteed or insured by an official ECA (article 47c).

It has been brought to our attention that the ongoing Capital Requirement Revision is expected to have a negative impact on the use, access and cost of certain types of our trade finance instruments which we use as exporters, importers, construction and engineering companies etc.

ZIA German Property Federation welcomes the opportunity to comment on the European Commission proposal (Banking Package 2021). Even though we see improvements compared to the initial package of the Basel Committee, the proposal will inevitably lead to more difficult financing conditions for the economy. The envisaged amendments are insufficient to absorb the negative economic consequences.

To the European Commission 2022 February 23, No. 22-034VK Copy: To the Government of the Republic of Lithuania To the Bank of Lithuania COMMENTS RE THE POTENTIAL ADVERSE CONSEQUENCES TO LITHUANIAN BUSINESSES PROPOSED CAPITAL REQUIREMENTS REGULATION (CRR3) The members of the Lithuanian Business Confederation (ICC Lithuania) – various small, medium and large enterprises as well as the largest financial institutions…

In its Banking Package 2021, the Commission proposes a review of EU banking rules to finalise the implementation of the Basel III agreement in the EU. While we recognise the Commission’s efforts to take EU specificities into account, its proposal is not yet in line with the mandate given to the Basel Committee to finalise the Basel III framework without significantly increasing overall capital requirements across…

CECA (Spanish Association of Savings and Retail Banks) welcomes the opportunity to comment on the Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor. Please find attached our comments.

Financing opinion on the 2021 Banking Package — According to the Commission’s objectives, the Banking Package aims to complete the implementation of the Basel III framework in Community law, and in particular to: — strengthen the risk-based capital framework, without significantly increasing capital requirements in general; — a stronger focus on environmental, social and governance (ESG) risks in the prudential…

Filed in French · English published by the European Commission

subject : ongoing EU-revision of CRR : Treatment of Performance guarantees and similar trade-related guarantees I'm technical advisor of ICC Belgium which covers trade-related issues for its members which are active in international trade.

FIA is the leading global trade organization for the futures, options and centrally cleared derivatives markets, with offices in Brussels, London, Singapore and Washington, D.C. FIA’s membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from about 50 countries as well as technology vendors, law firms and other professional service providers.

As an industrial engineering Group exporting in all regions of Europe mainly from Europe, where we have more than 5000 employees, we are particularly concerned by the change from 20% to 50% of CCF for the traditional trade finance products we widely use in our day-to-day business.

Key requests of the attached opinion: —Promoting institutions such as guarantee banks must, in the case of EC requirements, lay down rules on: Renunciation of credit ratings and home country coverage — The wording on the granularity criterion must be retained as a recommendation — SME correction factor is a practical test and must be maintained in its current form — Maintaining the country of residence principle for…

Filed in German · English published by the European Commission

We have discussed with a number of our banks of a potential revision of Basel requirements on certain types of guarantees. These changes relate mainly to : 1. an increase of the credit conversion factor (CCF) from 20 % to 50 % on Technical Guarantees 2. Effective Maturity vs 2,5 years fixed On point 1.

Finance Watch welcomes the initiative of the EU co-legislators to proceed with the implementation of the final instalment of the Basel III standards. We note, however, that the primary and overarching objective of the Basel III process – to restore financial stability and protect EU citizens and society at large from excessive risk-taking in the banking sector – is no longer mentioned as a policy objective in the…

The Spanish Banking Association (AEB) welcomes the European Commission proposal for the EU transposition of the “Basel III: Finalizing post-crisis reform” standard. AEB acknowledge the efforts made by the EU regulators to achieve several goals such as: - Reducing the impact in terms of capital requirement which will foster the efficiency of the EU banking sector.

It has been brought to our attention that the ongoing Capital Requirement Revision is expected to have a negative impact on the use, access and cost of certain types of our trade finance instruments which we use as exporters, importers, construction and engineering companies etc.

CBA comments on provisions in the draft EU Capital Requirements Directive VI (“CRD VI”) regarding cross-border business and third country branches China Banking Association (CBA) supports the EU’s efforts to strengthen banks’ resilience and enhance financial stability through the CRD6/CRR3 package (the Proposals).

The European Savings and Retail Banking Group (ESBG) positively assesses the banking package proposal issued by the European Commission. It transposes the final elements of the Basel III reforms in the EU regulatory framework and it pursues other prudential and supervisory objectives.

ASF, the French Association of Specialised Finance Companies, represents specialised financial institutions focusing on 8 business lines offering specialised finance to companies and households (factoring, real estate leasing, equipment leasing, guarantees, consumer credit, investment services, finance of renewable energy and home loans).

The Lloyd's Market Association (LMA) exists at the very heart of Lloyd's, a world-leading global marketplace for complex risk where solutions to challenges are delivered every day. All 51 Lloyd's managing agencies, who write approximately £36 billion of premium per annum, and all Lloyd's members agents, are members of the LMA.

For the attention of DG FISMA Dear Madam, dear Sir, Thank you for requesting feedback on the draft CRR dated 27th October 2021. We are pleased in the name of ITFA to submit the attached paper for your consideration. Kind regards, For and on behalf of ITFA International Trade and Forfaiting Association

Leaseurope welcomes the Proposal of the European Commission to implement the finalisation of Basel III in Europe. Most of the issues regarding the implementation of the Basel standards are a consequence of choices made at international level, which make a tailored implementation of Basel taking into account the specificities of Europe’s financial system more difficult.

The EUF welcomes the opportunity to provide its comments on the proposed amendments to the CRR aimed to finalize the Basel III framework. In this perspective, the EUF believes that the European Commission should consider the following comments and proposals: • On the definition of “ancillary services undertaking”: to clarify better the Commission’s concerns about “factoring undertakings” out of the scope of…

The Austrian Raiffeisen Banking Group (RBG) basically appreciates the determination of the European Commission to increase the resilience of the EU banking sector by continuously implementing the Basel III framework in a step-by-step approach. However, we would like to raise the attention to specific elements of the EC's legislative proposal on ‘Basel IV’.

Swedbank supports the responses to the Have your say consultation from the European Banking Federation, the European Savings and Retail Banking Group, and the group of three Nordic banking associations (Finance Denmark, the Swedish Bankers Association, and Finance Finland).

The European Association of Corporate Treasurers (“EACT”) – which brings together 24 national associations, representing over 6.500 companies across Europe – welcomes the objectives of the review of the banking framework which should contribute to ensuring financial stability and economic growth.

Although we fully recognize benefits of “CRR3” as a major contributor for a robust and stable financial system, this proposal raises 2 majors contentious issues which, if adopted, will trigger severe impacts to the detriment of the whole European Trade Finance industry: · The increase in CCF for Technical Guarantees from 20% to 50% (Bid, Performance, Advance Payment, Warranty Bonds and Stand/By Letters of Credit…

It has been brought to our attention that the ongoing Capital Requirement Revision is expected to have a negative impact on the use, access and cost of certain types of our trade finance instruments which we use as exporters, importers, construction and engineering companies etc.

The CRR Prudent Property Valuation Approach The International Valuation Standards Council (IVSC) is the independent global standard setter for the valuation profession. The IVSC set International Valuation Standards which promote consistency and professionalism in the public interest. The subsequent comments address the new prudent property valuation approach enshrined in the proposed CRR amendment (Article 229).

Dear Sirs, It has been brought to our attention that the ongoing Capital Requirement Revision is expected to have a negative impact on the use, access and cost of certain types of our trade finance instruments which we use as exporter/importer, construction and engineering company.

The Confederation of Swedish Enterprise welcome this opportunity to give feedback regarding the proposed amendment to Regulation (EU) No 575/2013 (the Capital Requirements Regulation or CRR) and the wider legislative package of which it is a part, known as Banking Package 2021. Please see the attached document for our views, which are very briefly summarised below.

The International Credit Insurance and Surety Association is the global trade association representing the leading providers of trade credit insurance and surety internationally. Our members provide services worldwide, but given the prominence of European markets, the majority of our trade credit insurance members are located within the EU and regulated under the Solvency II framework.

EQUANS is a group of companies heavily relying on bank guarantees for its business all over the world and particularly in Europe. The proposed Revision would imply a significant increase in the cost of bank guarantees potentially impacting our competitiveness.

It has been brought to our attention that the ongoing Capital Requirement Revision is expected to have a negative impact on the use, access and cost of certain types of our trade finance instruments which we use as exporters, importers, construction and engineering companies etc.

The CRR Prudent Property Valuation Approach The Royal Institution of Chartered Surveyors (RICS) have over 134,000 highly qualified trainees and professionals, many operating globally as property valuers and appraisers.

The European Federation of Building Societies (EFBS) is an association of credit and other institutions promoting and supporting the financing of home ownership. Its purpose is to encourage the idea of acquiring home ownership in Europe that is converging both politically and economically.

Credimpex Italia, founded in 1985, is a non-profit Association of persons, born among banking sector specialists in Italy and involved in international trade. Credimpex Italia now also includes logistics operators, law firms and employees of companies, operating with foreign countries, that necessarily have to deal with the settlement of international trade techniques. We currently have 505 members.

IACPM (International Association of Credit Portfolio Managers) appreciates the opportunity to provide feedback on the 2021 Banking Package. We are a global association of credit portfolio managers of which more than half of the membership is comprised of European financial institutions, mainly banks.

Art. 4 (1) point (145) CRR should be amended as to include a de minimis threshold. Institutions with a balance sheet total of under € 750 million should be able to obtain the status as small and non-complex regardless of whether the criterion (f) is met, according to which more than 75 % of both the institution's consolidated total assets and liabilities, excluding in both cases the intragroup exposures, must relate…

It has been brought to our attention that the ongoing Capital Requirement Revision is expected to have a negative impact on the use, access and cost of certain types of our trade finance instruments which we use as exporters, importers, construction and engineering companies etc.

The Swedish Bankers’ Association has submitted a joint response to the Commission’s consultation together with Finance Denmark and Finance Finland. In the proposal, the Commission has chosen an approach for the output floor that applies the floor also on capital requirements beyond the capital requirements agreed upon at international level.

Reclaim Finance underlines that the Commission's proposal sidelines the key objective of Basel III - protecting financial stability and increasing the EU financial system's resilience - to integrate the demand of the financial industry to constrain capital requirement increases. Furthermore, the Commission fails to begin the integration of climate-related risks management into the prudential framework.

The increase from 20 to 50 % in the conversion factor affecting credit institutions’ commitments per signature, in particular in the context of international trade financing operations, would be a serious error of such a nature as to seriously impair the competitiveness of European export companies. Shortcomings in this area of activity are very rare.

Filed in French · English published by the European Commission

We welcome the proposed measures that limit the negative effects of the regulatory framework on bank’s capital requirement and thus on the real economy (e.g., the retention of specific treatments, the implementation periods and the relief for banks when calculating the output floor (OF)). In the upcoming legislative process, it is essential not to dilute these measures - where they are risk-adequate.

Finance Denmark has submitted a joint response to the Commission’s consultation together with the Swedish Bankers’ Association and Finance Finland. In the proposal, the Commission has chosen an approach for the output floor that applies the floor also on capital requirements beyond the capital requirements agreed upon at international level.

The China Chamber of Commerce to the EU (CCCEU) is a business organisation that gathers Chinese-invested corporations in Europe. As such, the CCCEU speaks on behalf of about 1,000 Chinese enterprises in the EU. Its mission is to promote China-EU economic cooperation, to increase the mutual understanding and dialogue between China and the EU, and to bridge the existing gaps and explore ways to enhance the…

International Chamber of Commerce (ICC) The International Chamber of Commerce (“ICC”) – the institutional representative of more than 45 million businesses in over 130 countries – warmly welcomes the objectives of the proposed Capital Requirements Regulation (“CRR3”).

The European Banking Federation (EBF) welcomes the intention of the European Commission, in the context of the Banking Package, to also bring more clarity to some aspects related to resolution. However, after an initial analysis of the draft text, we are of the opinion that some technical aspects, described in more detail in the file attached, would deserve additional consideration.

The Banking Package should strike the right balance between meeting the fundamentals of the Basel Committee reform, keeping the capital requirements for banks without any significant increase as mandated by the G20 and reiterated by the European Parliament and the European Council and, also, observing key European specificities.

The Belgian Financial Sector Federation recognises and welcomes the efforts of the European Commission to implement the fundamentals of the final Basel III standard while considering European specificities in the EU Banking Package proposal.

The fundamental problem of the implementation of the latest Basel standards resides in choices made at Basel level which make an adequate EU implementation challenging. The EACB acknowledges the Commission’s efforts to reduce the expected impact of reforms on the EU banking and credit markets and economy, while remaining compliant with the spirit of the global agreement, but further efforts are necessary.

1. Floors strengthen a diverse banking system. We have been looking forward to the final implementation of Basel III, especially the implementation of the floors. It would protect the financial system against a race to the bottom; the diversity in the banking landscape of large and small players, various banking business models and most of the banks using the standardised approach.

The German Banking Industry Committee welcomes in principle the legislative proposal published on 27 October 2021 by the European Commission, the so-called Banking Package 2021, to implement the final elements of the Basel III reforms in the EU regulatory framework.

EU mortgage markets are fundamental to the economy. They provide access to finance for citizens to buy homes and for SMEs, stimulating investment and job creation. They will be vital to the post-pandemic recovery in many countries and the climate transition.

The French Banking Federation (FBF) welcomes the proposal of the European Commission for the review of the Capital Requirements Regulation and Directive in the context of the Banking Package. The proposal is not yet in line with the mandate given by the G20, the Council and the European Parliament to the Basel Committee not to lead to a significant increase in capital for all banking communities.

Mutual Funds and, more recently, semi-transparent ETPs employ limited or delayed reporting of their holdings to protect their IP. With the plan to introduce a monthly look-through requirement, proposed under 325j(1)(a), what is the expectation for banks to calculate capital requirements for these kinds of instruments?

While the European Union faces huge challenges in ensuring the energy, ecological and digital transition of its economy and financing the hundreds of billions of euros of necessary investments, Medef is extremely concerned about the consequences of the transposition of the Basel agreements of December 2017 into their current form:  A negative macroeconomic impact: impact studies carried out by the European Banking…

AFTE is the French Association of Corporate Treasurers representing the corporate treasuries of non financial companies (about 1 000 French members). We welcome the effort to increase the resilience of the EU financial system but we would urge for a careful risk based analysis of prudential requirements under Basel 3.

AFEP – the French Association of Private Enterprises – represents 113 of the largest private corporations operating in France and takes part in the public debate in order to provide pragmatic solutions to develop a competitive French and European economy.

In summary, we are concerned that MiFID-authorised asset managers are being brought into scope of the EU intermediate parent undertaking (EU IPU) requirements. Please refer to our submitted letter which has more detail, and drafting solutions. Our letter also comments on internal TLAC.

The European transposition of the Dec. 2017 Basel Accord is not merely an issue of banking supervision, but also one of the key issues in defending the sovereignty and competitiveness of the European economy. Banks have significantly increased their financial stability over the last decade (the solvency ratio of French banks, for example, improved from 5.8% to 13.8% between 2008 and 2017).

1. Implementation Basel IV – Costs and Benefits According to EBA and ECB (Basel III reforms: impact study and recommendations) the cost of implementing the final Basel III reforms in the EU such as possible increases in capital requirements for banks would appear to be outweighed by the benefits for the economy as a whole, in particular over the longer term.