On Jun. 12, 2025, EU CNCL adopted changes to EU liquidity rules for banking sector.
The amendments aim to maintain liquidity in financial markets and ensure a more level playing field for EU banks vis-à-vis their international peers.
Decision renders permanent the current transitional ratio levels of certain short-term securities financing transactions held by banks; ratio levels are used to help calculate a key prudential and stability requirement known as net stable funding ratio or NSFR.
This is the last step of the adoption procedure; amendments to Capital requirements regulation will now be published in official journal and shall apply from Jun. 29, 2025.
EU EBA will monitor and report on the impact of the amendments every five years.
On Feb. 10, EC opened call for evidence on net stable funding ratio.
EU CMSN opened a call for evidence on net stable funding ratio - prudential treatment of short-term securities financing transactions (amending regulation).
Proposed Regulation
This initiative focuses on a proposed regulation which would amend Reg 575/2013 on prudential requirements for credit institutions and investment firms.
Amendment would render permanent the currently transitory treatment of short-term securities financing with financial customers for calculation of net stable funding ratio.
This would avoid any lapse in current treatment and help to ensure an international level playing field in the treatment of short-term securities financing transactions.
Effectiveness
Feedback period for call for evidence is from Feb. 10, 2025 to Mar. 10, 2025.
Adoption is planned for Q1/2025.
In Mar 2025, ECB responded to CfE regarding net stable funding ratio, see #246349.
Mar. 31, 2025 EU CMSN Proposal
On Mar. 31, 2025, EU CMSN proposed maintaining current liquidity rules to strengthen EU financial markets to ensure level playing field between EU and international banks.
The proposal for a targeted legislative amendment to the CRR to maintain the transitional liquidity risk treatment of some financial instruments will now be reviewed by the EP and EU CNCL; a staff working document accompanies the proposal.
Apr. 2025 EU EESC Opinion
On Apr. 4, 2025, EU EESC issued its opinion on amendment to the Capital Requirements Regulation-prudential requirements, endorsing the proposed text.
Apr. 25, 2025 Mandate for Negotiations
On Apr. 25, 2025, EU CNCL issued notes concerning mandate for negotiations with EP.
Coreper invited to agree on the text of the mandate for negotiations with EP as set out in document ST 8201/25; and, on basis of that text, grant a mandate to Presidency for negotiations with the European Parliament, with a view to reaching an agreement.
May 2025 EP First Reading
On May 26, 2025, EU CNCL issued information note on EP having adopted its first-reading position on May 22, 2025 by taking over the EC proposal and rejecting all the tabled amendments; this position is contained in its legislative resolution.
EU CNCL should therefore be in a position to approve EP's position as per annex.
This would bring to a close the first reading for both Institutions, and the act would then be adopted in the wording which corresponds to European Parliament's position.
May 28, 2025 Adopted Text Published
On May 28, 2025, EU CNCL published text adopted by EP at first reading on May 22.
This regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union and shall apply from Jun. 29, 2025.
Jun. 2025 Amendments Adopted
On Jun. 12, 2025, EU CNCL adopted changes to EU liquidity rules for banking sector.
The amendments aim to maintain liquidity in financial markets and ensure a more level playing field for EU banks vis-à-vis their international peers.
Decision renders permanent the current transitional ratio levels of certain short-term securities financing transactions held by banks; ratio levels are used to help calculate a key prudential and stability requirement known as net stable funding ratio or NSFR.
This is the last step of the adoption procedure; amendments to Capital requirements regulation will now be published in official journal and shall apply from Jun. 29, 2025.
EU EBA will monitor and report on the impact of the amendments every five years.
