Adjusting to the operational challenges imposed by these exceptional times, the members of the European Association of Co-operative Banks (EACB) working groups on Recovery, resolution and deposit protection and Banking Regulation convened virtually on Monday 30th and Tuesday 31st March respectively. Both working groups held intensive discussions on the measures taken so far and further adjustments needed to try and ease the impact of the Covid19 crisis on the real economy and on financial stability.
In particular, on 30th March the Recovery, resolution and deposit protection WG discussed the need to introduce adjustments in the resolution framework and requirements (e.g. timeline for fulfilling MREL requirements, contributions to the Single Resolution Fund, production of deliverables for the resolution authorities etc.) to allow banks to focus on core activities and avoid unintended consequences on banks’ resilience. They also exchanged on the latest developments in the area of EDIS and DGSD implementation, among other things.
On 31st March the Banking Regulation WG discussed key prudential aspects in the context of the current crisis, also taking into account notable regulatory and supervisory actions already undertaken by the EBA and SSM. Among other aspects the need for a consistent treatment across the EU of public and private moratoria for loans for prudential purposes was stressed. Members also welcomed the decision of the BCBS to postpone for 1 year the implementation timeline of the Basel IV proposals. Further discussions on this will be certainly needed at EU level in light of the economic downturn expected.
Cooperative banks remain committed to support financing of the real economy and act as a stabiliser in times of crisis. To perform this role it is necessary that regulatory and supervisory measures take into account the unprecedented scale of the challenges at hand.