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News article6 September 2023Directorate-General for Financial Stability, Financial Services and Capital Markets Union1 min read

Commission adopts reporting rules on banks’ exposure to shadow banking

The European Commission adopted today technical standards to be used by credit institutions when reporting their exposures to shadow banking entities, as required by the Capital Requirements Regulation.

These standards set out criteria for the identification of shadow banking entities, ensuring the harmonisation and comparability of exposures reported by credit institutions. The standards will also provide supervisors with robust data to assess banks’ risks in relation to non-banking financial intermediaries. This will reinforce the prudential framework, allowing for an improved transparency of the material linkages between the traditional banking sector and the shadow banking sector.

Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union, said: “Non-bank financial institutions have grown during recent years. Some have built up considerable leverage and liquidity mismatches and, as highlighted by the recent losses in the banking sector involving those entities, their activity could pose a risk to the financial system. Today’s rules provide EU-active banks with additional clarity on which entities come under shadow banking, ensuring reporting consistency across banks and improving supervisors’ capacity to detect the build-up of large exposures to non-bank financial institutions and manage the risks effectively”.

Today's requirements, adopted in the form of a Delegated Regulation, will now be formally transmitted to the European Parliament and the Council, who will have three months to scrutinise the act.

More information on the technical standards adopted today

Prudential requirements