6.4.2022
EN
Official Journal of the European Union
C 152/111
Opinion of the European Economic and Social Committee on ‘Proposal for a Regulation of the European Parliament and of the Council 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’ (COM(2021) 665 final — 2021/0343 (COD)) (2022/C 152/18)
Rapporteur-general: Antonio GARCÍA DEL RIEGO
Referrals
Council of the European Union, 26.11.2021 European Parliament, 22.11.2021
Legal basis
Article 114 of the Treaty on the Functioning of the European Union
Section responsible
Economic and Monetary Union and Economic and Social Cohesion
EESC President decision
9.11.2021
Adopted at plenary
9.12.2021
Plenary session No
565
Outcome of vote (for/against/abstentions)
174/2/3
1.
Conclusions and recommendations 1.1.
The EESC deems it is necessary to incorporate directly into the Capital Requirements Regulation (CRR) a dedicated prudential treatment related to the indirect subscription of instruments eligible for internal Minimum Requirement for own funds and Eligible Liabilities (MREL).
The proposed modifications to the CRR would address the identified inconsistencies between the CRR and the Bank recovery and resolution directive (BRRD).
1.2.
The EESC recommends clearer CRR provisions on the comparison between the sum of the actual Total Loss Absorbing Capacity (TLAC) requirements of all the resolution groups within a global systemically important institutions (G-SII) group with a multiple point of entry (MPE) resolution strategy with the theoretical single point of entry (SPE) requirement of that G-SII group.
The changes proposed are needed to clarify the extent to which resolution authorities can address the potential inconsistencies between SPE and MPE requirements.
1.3.
The EESC stresses that it is necessary to amend the formula for the calculation of the TLAC/MREL surplus of a subsidiary in the context of the general deduction regime applicable to G-SIIs with an MPE resolution strategy, to ensure that that formula takes into account both the risk-based and the non-risk-based TLAC/MREL requirements of the subsidiary, in line with the TLAC standard.
This would avoid that the TLAC/MREL surplus of a given subsidiary is overestimated.
1.4.
The EESC draws attention to the fact that some CRR provisions applicable to G-SIIs with an MPE resolution strategy should be clarified to allow for the consideration of subsidiaries established outside of the EU.
This would align the CRR with the corresponding TLAC principle agreed internationally, which is applicable with respect to subsidiaries established in all Financial Stability Board (FSB) jurisdictions.
1.5.
The EESC recommends some targeted clarifications in the context of the requirement for own funds and eligible liabilities for institutions that are material subsidiaries of non-EU G-SIIs (‘internal TLAC’), in order to ensure that debt instruments issued by those institutions meet all eligibility criteria for eligible liabilities instruments.
The reason for this change is that currently the eligibility criteria for eligible liabilities instruments are based on the assumption that those instruments are issued by a resolution entity, and not by subsidiaries subject to an internal TLAC requirement.
The gap