Covid-19 crisis response - adjustments in banking prudential rules

Key points:

The EESC

• welcomes the adjustments in banking prudential rules, that must be adopted with all speed so that the resources thus freed up can be used as effectively as possible in order to deal with the present and future impact of COVID-19.
• agrees with the decision to postpone the implementation of the consolidated Basel III framework. However, the proposal to review the directives and regulations is appropriate. Further impact assessments might be necessary in this context.
• is concerned that it might not be possible to meet other regulatory deadlines at this stage, in view of the operational challenges facing banks (and the authorities).
• supports the proposal to bring forward the dates for implementing some capital absorption calibrations provided for in the Capital Requirements Regulation (CRR) but not yet applicable, because every effort must be made to push banks to support the real economy as effectively as possible.
• upholds the need to introduce a green and social supporting factor, which will reduce capital absorption, for financing granted by banks for social economy enterprises and those enterprises genuinely involved in sustainable and inclusive development programmes.
• considers that the so-called "prudential filter", already provided for in the Basel II framework, needs to be introduced on a temporary basis to remove unrealised assets and losses from balance sheets.