The European Banking Authority has published a letter, dated February 9, 2018, from the EBA Chairperson, Andrea Enria, to Olivier Guersent, Director-General of DG-FISMA at the European Commission, relating to the regulatory perimeter of the Capital Requirements Regulation and the Capital Requirements Directive. The letter is in response to the January 22, 2018 letter to the EBA from the European Commission regarding the EBA's Opinion on regulatory perimeter issues under the EU capital requirements framework and the proposed changes under CRD V.

The CRD gives member states the discretion to exempt entities (such as saving companies, structured finance vehicles and hire purchase providers) that are not banks but which take deposits and other repayable funds from the public, provided that those entities are expressly covered by national law. Analysis by the EBA has revealed that member states have adopted different approaches to implementing this discretion because of the differing meanings that have been attributed to core terms within the provisions, in particular, “deposit,” “other repayable funds” and “public.” The EBA considers that the CRD V proposal to remove that national discretion needs to be further substantiated by an impact assessment, because some member states rely on it and because it may be too burdensome for these entities to become licensed as a bank. The EBA highlights that alternative approaches should be considered, such as requiring the EBA to monitor national practices in the application of that discretion, requiring member states to report to the EBA on the use of the discretion and requiring the EBA to recommend any appropriate legislative changes regarding the relevant definitions.

The European Parliament and Council of the European Union are currently considering the CRD V proposals. The ultimate changes are dependent on the outcome of that legislative process.

View the letter.

View the EBA's Opinion.

View the Commission's CRD V proposals.