GE BaFin issued a supervisory notice showing what scope small credit insitutions have in their risk management and introduces simplifications to assist these smaller firms.
Around 75% of German credit institutions (950) are likely to benefit from changes.
Overview
GE BaFin points out existing leeway is not always used by banks, shows how small institutions can make risk management less complex while managing it effectively.
For example, in outsourcing management small institutions can make greater use of group or association-internal outsourcing management instead of their own.
Also room for maneuver for smaller institutions on service provider management.
And presents new simplifications, for example re stress tests, small institutions can dispense with inverse stress tests and only have to carry out one liquidity test per year.
Also simplifications in reporting, e.g. if no relevant changes in the relevant parts of overall risk report in the past quarter small institutions no longer have to update their overall risk reports on a quarterly basis, but only once a year instead.
Definition of small institutions is based on the Capital Requirements Regulation (CRR).
GE BaFin also published an interview with its executive director Raimund Röseler which discusses the background to the changes and the content of the supervisory notice.
Effectiveness
Supervisory notice and simplifications apply from date of publication, Nov. 26, 2024.
Regulators
GE BaFin
Entity Types
Bank; MSB
Reference
Nt, PR, 11/26/2024; CRD/CRR Dir 2013/36, Reg 575/2013; CRR2 2019/876
