Risk & Regulation Channel News: Video CRR3 Update: ECB Consultation on the approach to options and discretions

In our latest episode on PwC's Risk and Regulation News Channel, Martin Neisen and Stefan Röth delve into the ECB Consultation on the approach to options and discretions available in EU law

With the implementation of the CRR 3 on January 1, 2025, the banking sector is gearing up for significant changes. As European banking rules allow Member States and banking supervisors to choose between alternative treatments (options) or how to apply certain provisions (discretions), the ECB consults on its revised policies on how the ECB will exercise the options and discretions available to supervisory authorities under EU law when supervising banks.

These options and discretions relate to several prudential rules, such as the definition of own funds, the calculation of capital requirements for certain risk categories, the types of assets included in the trading book and the exclusions allowed when determining the consolidation scope of a banking group.

In this video Head of EBA/SSM Office Martin Neisen and CRR3 Leader Germany Stefan Röth give an overview about the content of the 5 documents of the consultation paper. They shed light on the main challenges and critical aspects of ECB's consultation paper with regard to: consolidated supervision and waivers, capital ratio and own funds, RWA and credit risk, market risk and CVA capital risk charge.

Follow-up videos will provide more detailed guidance and insights on these topics - stay tuned!