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Document 52025HB0026
Recommendation of the European Central Bank of 15 July 2025 amending Recommendation ECB/2017/10 on common specifications for the exercise of some options and discretions available in Union law by national competent authorities in relation to less significant institutions (ECB/2025/26)
Recommendation of the European Central Bank of 15 July 2025 amending Recommendation ECB/2017/10 on common specifications for the exercise of some options and discretions available in Union law by national competent authorities in relation to less significant institutions (ECB/2025/26)
Recommendation of the European Central Bank of 15 July 2025 amending Recommendation ECB/2017/10 on common specifications for the exercise of some options and discretions available in Union law by national competent authorities in relation to less significant institutions (ECB/2025/26)
ECB/2025/26
OJ C, C/2025/4190, , ELI: http://data.europa.eu/eli/C/2025/4190/oj (BG, ES, CS, DA, DE, ET, EL, EN, FR, GA, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
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Official Journal |
EN C series |
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C/2025/4190 |
28.7.2025 |
RECOMMENDATION OF THE EUROPEAN CENTRAL BANK
of 15 July 2025
amending Recommendation ECB/2017/10 on common specifications for the exercise of some options and discretions available in Union law by national competent authorities in relation to less significant institutions
(ECB/2025/26)
(C/2025/4190)
THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
Having regard to the Treaty on the Functioning of the European Union,
Having regard to Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (1), and in particular Article 4(3) and Article 6(1) and (5)(c) thereof,
Whereas:
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(1) |
Recommendation ECB/2017/10 of the European Central Bank (2) (hereinafter the ‘O&D Recommendation’) establishes common specifications for the exercise of certain options and discretions available in Union law by national competent authorities (NCAs) in relation to less significant institutions.The O&D Recommendation was amended by Recommendation ECB/2022/13 of the European Central Bank (3) to take account of legislative changes introduced since its adoption. |
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(2) |
New options and discretions have since been introduced in Union law, and existing options and discretions have also since been amended or deleted, including options and discretions that are included in the O&D Recommendation. It is therefore appropriate to align the O&D Recommendation accordingly. |
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(3) |
With regard to the option for a competent authority to decide that an institution is not to be considered a small and non-complex institution on the basis of an analysis of its size, interconnectedness, complexity or risk profile, the ECB considers it necessary to encourage a harmonised approach by setting out circumstances in which NCAs should assess whether a credit institution should not be considered a small and non-complex institution. |
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(4) |
Therefore, Recommendation ECB/2017/10 should be amended accordingly, |
HAS ADOPTED THIS RECOMMENDATION:
PART ONE
Amendments
Recommendation ECB/2017/10 is amended as follows:
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(1) |
in PART TWO, the following Section Ia is inserted: ‘ Ia. Small and non-complex institutions 1. Article 4(1)(145)(i) of Regulation (EU) No 575/2013: small and non-complex institutions When a less significant institution (LSI) has been identified as a High Risk LSI (*1) for more than four quarters in a row, the NCA should carry out an assessment on whether or not that institution should be considered a small and non-complex institution on the basis of an analysis of its risk profile. (*1) LSIs are classified as high risk based on a risk assessment carried out by the relevant NCA and on their compliance with capital and leverage requirements.’;" |
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(2) |
the Annex is replaced by the Annex to this Recommendation. |
PART TWO
Addressees
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1. |
This Recommendation is addressed to the NCAs of participating Member States. |
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2. |
NCAs are recommended to apply this Recommendation as of the date of its adoption. |
Done at Frankfurt am Main, 15 July 2025.
The President of the ECB
Christine LAGARDE
(1) OJ L 287, 29.10.2013, p. 63, ELI: http://data.europa.eu/eli/reg/2013/1024/oj.
(2) Recommendation of the European Central Bank of 4 April 2017 on common specifications for the exercise of some options and discretions available in Union law by national competent authorities in relation to less significant institutions (ECB/2017/10) (OJ C 120, 13.4.2017, p. 2).
(3) Recommendation of the European Central Bank of 25 March 2022 amending Recommendation ECB/2017/10 on common specifications for the exercise of some options and discretions available in Union law by national competent authorities in relation to less significant institutions (ECB/2022/13) (OJ C 142, 30.3.2022, p. 1).
ANNEX
The Annex to Recommendation ECB/2017/10 is replaced by the following:
‘ANNEX
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Legal basis of the option and/or discretion |
Approach recommended: consistency with the policy on options and discretions for significant institutions |
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Consolidated supervision and waivers of prudential requirements |
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Article 4(1), point (20) of Regulation (EU) No 575/2013: discretion to exclude entities from the financial holding company definition |
Section II, Chapter 1 paragraph 3 of the ECB Guide |
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Article 7(1) to (3) of Regulation (EU) No 575/2013: capital waivers |
Section II, Chapter 1 paragraph 4 of the ECB Guide |
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Article 8(1) and (2) of Regulation (EU) No 575/2013: liquidity waivers |
Section II, Chapter 1 paragraph 5 of the ECB Guide |
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Article 9 of Regulation (EU) No 575/2013: individual consolidation method |
Section II, Chapter 1 paragraph 6 of the ECB Guide |
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Article 10(1) and (2) of Regulation (EU) No 575/2013: waivers for credit institutions permanently affiliated to a central body |
Section II, Chapter 1 paragraph 7 of the ECB Guide |
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Article 18(3) of Regulation (EU) No 575/2013 in conjunction with Article 2 of Delegated Regulation (EU) 2022/676 (*1): methods for consolidation in the case of undertakings related within the meaning of Article 22(7) of Directive 2013/34/EU |
Section II, Chapter 1 paragraph 9 of the ECB Guide |
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Article 18(5) of Regulation (EU) No 575/2013 in conjunction with Article 4 of Delegated Regulation (EU) 2022/676: methods for consolidation in the case of participations or capital ties other than those referred to in Article 18(1) and (4) |
Section II, Chapter 1 paragraph 10 of the ECB Guide |
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Article 18(6) of Regulation (EU) No 575/2013, in conjunction with Articles 5 and 6 of Delegated Regulation (EU) 2022/676: consolidation in the cases of significant influence and common management |
Section II, Chapter 1 paragraph 11 of the ECB Guide |
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Article 18(7) of Regulation (EU) No 575/2013: consolidation |
Section II, Chapter 1 paragraph 12 of the ECB Guide |
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Article 18(8) of Regulation (EU) No 575/2013, in conjunction with Article 7 of Delegated Regulation (EU) 2022/676: consolidation |
Section II, Chapter 1 paragraph 13 of the ECB Guide |
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Article 19(2) of Regulation (EU) No 575/2013: exclusion of consolidation |
Section II, Chapter 1 paragraph 14 of the ECB Guide |
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Article 24(2) of Regulation (EU) No 575/2013: valuation of assets and off-balance sheet items – use of International Financial Reporting Standards for prudential purposes |
Section II, Chapter 1 paragraph 15 of the ECB Guide |
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Article 21a(4a) of Directive 2013/36/EU: Discretion to exclude an exempted financial holding company and mixed financial holding company from prudential consolidation |
Section II, Chapter 1 paragraph 16 of the ECB Guide |
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Own funds |
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Article 26(3) of Regulation (EU) No 575/2013: classification as CET1 instruments of subsequent issuances |
Section II, Chapter 2 paragraph 3 of the ECB Guide |
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Article 49(1) of Regulation (EU) No 575/2013: deduction of insurance holdings |
Section II, Chapter 2 paragraph 5 of the ECB Guide |
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Article 49(2) of Regulation (EU) No 575/2013: deduction of holdings of financial sector entities |
Section II, Chapter 2 paragraph 6 of the ECB Guide |
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Article 54(1), point (e) of Regulation (EU) No 575/2013: calculation of the trigger for additional Tier 1 instruments issued by subsidiary undertakings established in third countries |
Section II, Chapter 2 paragraph 7 of the ECB Guide |
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Article 78(1)(b) of Regulation (EU) No 575/2013: reduction of own funds – excess capital margin requirement |
Section II, Chapter 2 paragraph 8 of the ECB Guide |
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Article 78(3) of Regulation (EU) No 575/2013: reduction of own funds – mutuals, savings and cooperatives |
Section II, Chapter 2 paragraph 10 of the ECB Guide |
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Article 78(4) of Regulation (EU) No 575/2013: reduction of additional Tier 1 or Tier 2 instruments and/or related share premium accounts |
Section II, Chapter 2 paragraph 11 of the ECB Guide |
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Article 79(1) of Regulation (EU) No 575/2013: reduction of additional Tier 1 or Tier 2 instruments |
Section II, Chapter 2 paragraph 12 of the ECB Guide |
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Article 83(1) of Regulation (EU) No 575/2013: waiver for additional Tier 1 and Tier 2 instruments issued by a special purpose entity |
Section II, Chapter 2 paragraph 13 of the ECB Guide |
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Article 84(5) of Regulation (EU) No 575/2013: minority interests included in consolidated Common Equity Tier 1 capital |
Section II, Chapter 2 paragraph 14 of the ECB Guide |
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Articles 84(1), point (a), 85(1), point (a), and 87(1), point (a) of Regulation (EU) No 575/2013: derogation from the “lower of the two requirements” criterion applicable to calculate minority interests and qualifying tier 1 and tier 2 |
Section II, Chapter 2 paragraph 15 of the ECB Guide |
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Article 142(1) of Directive 2013/36/EU: failure to meet combined buffer requirement or leverage ratio buffer requirement |
Section II, Chapter 10 paragraph 11 of the ECB Guide |
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Capital requirements |
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Article 104(4) of Regulation (EU) No 575/2013: trading book classification exemption |
Section II, Chapter 3 paragraph 3 of the ECB Guide |
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Article 104(5) of Regulation (EU) No 575/2013: non-trading book classification exemption |
Section II, Chapter 3 paragraph 4 of the ECB Guide |
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Article 113(6) of Regulation (EU) No 575/2013: calculation of risk weighted exposure amounts – intra-group exposures |
Section II, Chapter 3 paragraph 5 of the ECB Guide |
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Article 244(2) and (3) and Article 245(2) and (3) of Regulation (EU) No 575/2013: significant risk transfer |
Section II, Chapter 3 paragraph 7 of the ECB Guide |
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Article 283(3) of Regulation (EU) No 575/2013: implementation of the internal model method |
Section II, Chapter 3 paragraph 8 of the ECB Guide |
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Article 284(4) and (9) of Regulation (EU) No 575/2013: calculation of the exposure value for counterparty credit risk |
Section II, Chapter 3 paragraph 9 of the ECB Guide |
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Article 314(3) of Regulation (EU) No 575/2013: derogation to calculate a separate interest, leases and dividends component for specific subsidiaries |
Section II, Chapter 3 paragraph 10 of the ECB Guide |
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Article 314(5) of Regulation (EU) No 575/2013: calculation of the services component for institutional protection scheme |
Section III, Chapter 2 paragraph 2 of the ECB Guide |
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Article 325c of Regulation (EU) No 575/2013: internal review of alternative standardised approach usage to the satisfaction of the competent authority and frequency of such review |
Section II, Chapter 3 paragraph 11 of the ECB Guide |
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Article 325t(5) and (6) of Regulation (EU) No 575/2013: permission for using the alternative definition of sensitivities (delta and vega) |
Section II, Chapter 3 paragraph 12 of the ECB Guide |
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Article 366(4) of Regulation (EU) No 575/2013: calculation of the value-at-risk number |
Section II, Chapter 3 paragraph 13 of the ECB Guide |
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Article 383b(2) of Regulation (EU) No 575/2013: own funds requirements for delta and vega risks (alternative sensitivities) |
Section II, Chapter 3 paragraph 14 of the ECB Guide |
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Articles 383p, 383s and 384(2) of Regulation (EU) No 575/2013: use of internal ratings to determine credit quality steps for standardised approach credit valuation adjustments and basic approach credit valuation adjustments |
Section II, Chapter 3 paragraph 15 of the ECB Guide |
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Institutional protection schemes |
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Article 8(4) of Regulation (EU) No 575/2013: liquidity waiver for members of institutional protection schemes |
Section II, Chapter 4 paragraph 3 of the ECB Guide |
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Large exposures |
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Article 396(1) of Regulation (EU) No 575/2013: compliance with large exposures requirements |
Section II, Chapter 5 paragraph 3 of the ECB Guide |
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Article 400(2)(c) of Regulation (EU) No 575/2013: compliance with large exposures requirements |
Section II, Chapter 5 paragraph 4 of the ECB Guide |
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Liquidity |
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Article 414 of Regulation (EU) No 575/2013: compliance with liquidity requirements |
Section II, Chapter 6 paragraph 3 of the ECB Guide |
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Article 422(8) of Regulation (EU) No 575/2013 and Article 29 of Delegated Regulation (EU) 2015/61: intragroup liquidity outflows |
Section II, Chapter 6 paragraph 10 of the ECB Guide |
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Article 425(4) of Regulation (EU) No 575/2013 and Article 34 of Delegated Regulation (EU) 2015/61: intragroup liquidity inflows |
Section II, Chapter 6, paragraph 14 of the ECB Guide |
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Article 8(1) of Delegated Regulation (EU) 2015/61: diversification of holdings of liquid assets |
Section II, Chapter 6 paragraph 5 of the ECB Guide |
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Article 8(3)(c) of Delegated Regulation (EU) 2015/61: management of liquid assets |
Section II, Chapter 6 paragraph 6 of the ECB Guide |
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Article 8(6) of Delegated Regulation (EU) 2015/61: currency mismatches |
Section II, Chapter 6 paragraph 4 of the ECB Guide |
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Article 17(4) of Delegated Regulation (EU) 2015/61: waiver of the unwind mechanism |
Section I, Chapter 5 paragraph 1 of the ECB Guide |
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Article 23(2) of Delegated Regulation (EU) 2015/61: outflows from other products and services |
Section II, Chapter 6 paragraph 7 of the ECB Guide |
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Article 24(4) and (5) of Delegated Regulation (EU) 2015/61 outflows from stable retail deposits |
Section III, Chapter 3 paragraph 1 of the ECB Guide |
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Article 24(6) of Delegated Regulation (EU) 2015/61: multiplier for retail deposits covered by a deposit guarantee scheme |
Section III, Chapter 3 paragraph 3 of the ECB Guide |
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Article 25(3) of Delegated Regulation (EU) 2015/61: higher outflow rates |
Section II, Chapter 6 paragraph 8 of the ECB Guide |
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Article 26 of Delegated Regulation (EU) 2015/61: outflows with inter-dependent inflows |
Section II, Chapter 6 paragraph 9 of the ECB Guide |
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Article 29 of Delegated Regulation (EU) 2015/61: preferential treatment within a group or an institutional protection scheme (IPS) |
Section II, Chapter 6 paragraph 10 of the ECB Guide |
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Article 30(2) of Delegated Regulation (EU) 2015/61: additional collateral outflows from downgrade triggers |
Section II, Chapter 6 paragraph 11 of the ECB Guide |
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Article 33(2) of Delegated Regulation (EU) 2015/61: cap on inflows |
Section II, Chapter 6 paragraph 12 of the ECB Guide |
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Article 33(3) to (5) of Delegated Regulation (EU) 2015/61: specialised credit institutions |
Section II, Chapter 6 paragraph 13 of the ECB Guide |
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Article 34 of Delegated Regulation (EU) 2015/61: inflows within a group or an IPS |
Section II, Chapter 6 paragraph 14 of the ECB Guide |
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Article 428b(5) of Regulation (EU) No 575/2013: net stable funding requirement (NSFR) – restriction of currency mismatches |
Section II, Chapter 6 paragraph 15 of the ECB Guide |
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Article 428f(1) of Regulation (EU) No 575/2013: NSFR – interdependent assets and liabilities |
Section II, Chapter 6 paragraph 16 of the ECB Guide |
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Article 428h of Regulation (EU) No 575/2013: NSFR – Preferential treatment within a group or an IPS |
Section II, Chapter 6 paragraph 17 of the ECB Guide. |
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Article 428p(7) of Regulation (EU) No 575/2013: NSFR – treatment of non-standard central bank operations |
Section I, Chapter 5 paragraph 1 of the ECB Guide |
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Article 428ai of Regulation (EU) No 575/2013: NSFR – application of the simplified net stable funding requirement (sNSFR) |
Section II, Chapter 6 paragraph 18 of the ECB Guide |
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Article 428aq(7) of Regulation (EU) No 575/2013 – NSFR – treatment of non-standard central bank operations (sNSFR) |
Section I, Chapter 5 paragraph 1 of the ECB Guide |
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Article 8 of Regulation (EU) No 575/2013: liquidity waivers |
Section II, Chapter 4 paragraph 3 of the ECB Guide |
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Leverage |
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Article 429a(2) of Regulation (EU) No 575/2013: preferential treatment in favour of public development banks |
Section II, Chapter 7 paragraph 3 of the ECB Guide |
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Article 429a(5) of Regulation (EU) No 575/2013: exemption of central bank reserves from calculation of leverage ratio |
Section I, Chapter 5 paragraph 1 of the ECB Guide |
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Article 429b(3) of Regulation (EU) No 575/2013: preferential treatment for notional cash pooling arrangements |
Section II, Chapter 7 paragraph 4 of the ECB Guide |
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Reporting requirements |
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Article 430(11) of Regulation (EU) No 575/2013: reporting on prudential requirements and financial information |
Section II, Chapter 8 paragraph 1 of the ECB Guide |
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General requirements for access to the activity of credit institutions |
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Article 21(1) of Directive 2013/36/EU: waiver for credit institutions permanently affiliated to a central body |
Section II, Chapter 9 paragraph 1 of the ECB Guide |
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Article 21b(2) of Directive 2013/36/EU: intermediate parent undertaking |
Section II, Chapter 9 paragraph 3 of the ECB Guide |
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Governance arrangements and prudential supervision |
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Article 91(6) of Directive 2013/36/EU: additional non-executive directorship |
Section II, Chapter 10 paragraph 4 of the ECB Guide |
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Article 108(1) of Directive 2013/36/EU: internal capital adequacy assessment process for credit institutions permanently affiliated to a central body |
Section II, Chapter 10 paragraph 5 of the ECB Guide |
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Articles 117 and 118 of Directive 2013/36/EU: cooperation obligations |
Section II, Chapter 10 paragraph 8 of the ECB Guide |
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Article 142 of Directive 2013/36/EU: capital conservation plans |
Section II, Chapter 10 paragraph 11 of the ECB Guide |
(*1) Commission Delegated Regulation (EU) 2022/676 of 3 December 2021 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards specifying the conditions in accordance with which consolidation is to be carried out in the cases referred to in Article 18(3) to (6) and Article 18(8) of that Regulation (OJ L 123, 26.4.2022, p. 1, ELI: http://data.europa.eu/eli/reg_del/2022/676/oj).
ELI: http://data.europa.eu/eli/C/2025/4190/oj
ISSN 1977-091X (electronic edition)