EBA and ESMA call to clarify margin requirements between CRR and EMIR

ESMA bond liquidity data

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) published today their joint report on the functioning of the Capital Requirements Regulation (EU) No 575/2013 (CRR) with the European Market Infrastructure Regulation (EU) No 648/2012 (EMIR).

The report calls for the requirements for credit, market, and counterparty credit risk in the CRR to be clarified. This clarification should ensure that only risks not already covered by specific financial resources for activities not related to clearing are to be covered by CRR requirements. This exclusion should also be extended to activities covered by interoperability arrangements.

In the Report, the EBA and ESMA have focused their analysis on a list of specific issues concerning the mandate of article 515(1) of the CRR, and in particular with regard to institutions operating a central counterparty (CCP). The recommendations included in the Report aim at avoiding duplication of requirements for derivative transactions and thereby avoid increased regulatory risk and increased costs for monitoring by Competent Authorities.

In particular, the following topics have been addressed in the Report:

  • Capital requirements for CCPs holding a banking licence;
  • Leverage and liquidity for CCPs;
  • Large exposures; (d) Difference in MPoR application;
  • Clients’ exposures to clearing members.

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