Regulation (EU) 2025/1215

What it is

PURPOSE: to amend Regulation (EU) No 575/2013 (Capital Requirements Regulation or CRR) to maintain the current transitional approach to the Net Stable Funding Ratio (NSFR) requirement. PROPOSED ACT: Regulation of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament acts in accordance with the ordinary legislative procedure and on an equal footing with the Council. BACKGROUND: the Net Stable Funding Ratio (NSFR) requirement is part of the Basel III international standards, which the EU agreed to implement as part of the wide-ranging reform of the prudential framework for banks in the aftermath of the 2008 Global Financial Crisis. This requirement aims to ensure that banks have stable funding sources to fund their activities and reduce their dependency on short-term wholesale funding. The NSFR requirement under Capital Requirements Regulation (EU) No 575/2013 or CRR has been applicable to credit institutions since 28 June 2021. The European Parliament adopted by 436 votes to 149, with 11 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 575/2013 on prudential requirements for credit institutions as regards requirements for securities financing transactions under the net stable funding ratio. Parliament adopted at first reading the Commission's proposal to amend Regulation (EU) No 575/2013 on capital requirements or ‘CRR Regulation’ in order to maintain the current transitional approach to the Net Stable Funding Ratio (NSFR) requirement. To avoid possible unintended consequences on capital markets liquidity and considering the safeguards provided by the current framework for banks, the proposal amends the CRR Regulation to maintain the current transitional treatment for monies due from securities financing transactions and for unsecured transactions with a residual maturity of less than six months, with financial customers. The EBA will report to the Commission on the appropriateness of this stable funding requirement by 31 January 2029 and every five years thereafter. To ensure the continuity of that prudential treatment, this amending Regulation should apply from 29 June 2025.

Official title: Regulation (EU) 2025/1215 of the European Parliament and of the Council of 17 June 2025 amending Regulation (EU) No 575/2013 as regards requirements for securities financing transactions under the net stable funding ratio (Text with EEA relevance)