Europe & the U.K.
EBA consultation on revised Guidelines on internal governance
7 Aug 2025: The European Banking Authority (EBA) launched a consultation on its revised Guidelines on internal governance under the Capital Requirements Directive (CRD). The proposed revisions reflect the changes introduced in the CRD framework and other relevant legislations, such as the Digital Operational Resilience Acts (DORA). The consultation will run until 5 October 2025 and is limited to the proposed changes.
EBA no action letter on ESG Pillar 3 disclosures & ESG risks dashboard
6 Aug 2025: The European Banking Authority (EBA) has issued a letter of no-action and called on supervisors not to prioritize enforcement of certain ESG Pillar 3 disclosure templates, notably the Green Asset Ratio (GAR) and Taxonomy-related templates 6 to 10, which are currently applicable to large, listed banks. These remain suspended until the end of 2026 amid evolving CRR 3 ITS and the European Commission’s Omnibus package on sustainability reporting. For all other banks, EBA ESG P3 will apply from 31/12/2026, instead of initially foreseen from 31/12/2025. At the time they start to report, they will only report a limited number of data points from EBA ESG P3. In tandem, the EBA has updated its ESG risk dashboard with December 2024 data, enhancing supervisory transparency on transition and physical climate exposures.
Final draft technical standards on the equivalent legal mechanism for unfinished property exposures under the Standardized Approach for credit risk
6 Aug 2025: The European Banking Authority (EBA) published its final Regulatory Technical Standards (RTS) specifying what constitutes an “equivalent legal mechanism” for unfinished property exposures under the Capital Requirements Regulation (CRR). These RTS are part of the first phase of the EBA’s roadmap for implementing the EU Banking Package and take into account the stakeholders’ feedback, including targeted amendments to ensure both prudential soundness and practical applicability across the EU.
EBA consultation to streamline technical standards on resolution plans & resolution colleges
5 Aug 2025: A public consultation has been launched to propose amendments to the RTS on resolution plans and the functioning of resolution colleges. The changes aim to simplify plan structure, enhance operational governance in cross-border groups, and improve coordination across authorities. Consultation closes 5 November 2025.
Draft crypto asset treatment RTS under CRR published
5 Aug 2025: The EBA released a final draft RTS under CRR 3 detailing technical methods for calculating and aggregating crypto asset exposures for capital purposes. The rules cover credit risk, counterparty credit risk, market risk, and CVA risk across asset-referenced tokens, tokens referencing other crypto assets, and unbacked crypto assets. They also define netting, aggregation, and hedging criteria, aligning with Basel SCO60 and MiCA standards. Notably, the “prudent valuation” requirement has been removed, replaced by clarified aggregation rules for long and short positions.
Final RTS on operational risk loss taxonomy published
4 Aug 2025: The EBA published three final draft RTS under the EU Banking Package, establishing a harmonized taxonomy for operational risk losses. These standards clarify the calculation of annual loss data, exemptions, and adjustments required during mergers or acquisitions.
2025 EU-wide stress test results confirm resilience
1 Aug 2025: The EBA released its 2025 stress test results covering 64 banks across 17 EU/EEA countries, representing roughly 75 % of EU banking assets. Under a severe scenario driven by geopolitical shocks, trade fragmentation, and supply disruptions, banks faced estimated losses of €547 billion. Despite this, they maintained strong capital buffers and sustained capacity to support the economy.
PRA publishes DP1/25 on Residential Mortgage LGD & PD under IRB
31 Jul 2025: The UK Prudential Regulation Authority issued Discussion Paper DP1/25 proposing fundamental changes to the treatment of residential mortgage exposures under the internal ratings-based (IRB) approach A key proposal is a new foundation IRB (FIRB) model, which would let firms model Probability of Default (PD) while applying PRA-prescribed supervisory values for Loss Given Default (LGD) and Exposure at Default (EAD), significantly reducing modelling burden for mid-sized banks. The paper also explores options to revise existing PD modelling constraints (e.g., the 30% cyclicality cap), allow simplified long-run average default rate methods, and consider through-the-cycle modelling frameworks. Feedback is requested by 31 October 2025.
Consultation on CP19/25: Restatement of CRR definitions
30 Jul 2025: The UK PRA Consultation paper CP19/25 sets out plans to migrate key definitions from Articles 4, 4A, 4B, and 5 of the UK CRR into the PRA Rulebook glossary, aligning with the UK’s post‑CRR regulatory framework. While the majority of terms will be "lift-and-shift" restatements, targeted adjustments are proposed to improve clarity, covering terms such as 'SME', 'large institution', and 'credit risk'. The PRA is coordinating with HM Treasury to reflect draft amendment regulations. Feedback is due by 30 October 2025. Final implementation is expected in line with Basel 3.1 timelines (no earlier than January 2027).
Q4 2024 MREL dashboard indicates widespread compliance
31 Jul 2025: EBA’s MREL dashboard covering 345 resolution-relevant institutions shows overall compliance with the minimum requirement for own funds and eligible liabilities (MREL) requirements under the Bank Recovery and Resolution Directive (BRRD). Shortfalls are largely confined to entities in transition. Additional €242 billion worth of instruments are due to become ineligible in the coming year. Consultation launched on harmonized reporting for third-country branches 31 Jul 2025: Public consultation opened on draft ITS for CRD-based supervisory reporting by third-country branches. The aim is to standardize definitions, formats, and frequencies across the EU. The consultation remains open until 31 October 2025.
ECB introduces climate factor into collateral framework
29 Jul 2025: The ECB has confirmed a new “climate factor” will be integrated into its collateral framework for refinancing operations, effective in the second half of 2026. This factor will reduce the eligible value of collateral assets based on sectoral risk, issuer climate metrics, and maturity, particularly for non‑financial corporate securities. This measure aims to safeguard the Eurosystem against climate‑related transition shocks while steering banks toward lower‑emission collateral pools.
Adjustments to the market risk framework – extension of CP17/25 consultation deadline
August 2025: The consultation on market risk framework adjustments under Basel 3.1 (CP17/25) has been extended from 5 September to 12 September 2025. This follows requests for more time to prepare substantive responses and aligns with other overlapping regulatory consultations (e.g., DP1/25).
Reissued 2024 O‑SII buffer rates for ring-fenced banks and large building societies
29 Jul 2025: The PRA has reaffirmed the 2024 O‑SII buffer rates for ring‑fenced banks and large building societies, in line with the updated Financial Policy Committee (FPC) framework. Thresholds now reflect a 27 % indexation to nominal GDP growth up to end‑2024, with full application from 1 January 2026.
Report on the direct provision of banking services from third countries
23 Jul 2025: The quantitative and qualitative analysis performed didn’t provide evidence to recommend the amendment of the new Article 21c of the Capital Requirement Directive (CRD), which identifies how core banking services should be provided in a Member State. The EBA concluded that no amendments to CRD Article 21c are necessary. Still, it recommends clearer guidance on the interaction between Article 21c and other sector-specific legislation to improve clarity for institutions and supervisors.
Asia-Pacific
HKMA issues revised governance guidance (SPM CG 1)
1 Aug 2025: HKMA gazetted updates to SPM module CG 1, invoking statutory guidance under Section 7(3) of the Banking Ordinance. The updates focus on:
- Strengthening board and senior management responsibilities, including active oversight of material business and external developments.
- Board composition: requiring independent non executive directors (INEDs) with financial experience, and mandating chair independence.
- Enhancing succession planning, competence training, and corporate culture oversight.
- Clarifying conflict-of-interest policies and strengthened reporting/disclosure obligations, particularly for roles such as Head of Internal Audit or Chief Risk Officer.
RBI sets new AIF investment limits
29 Jul 2025: The Reserve Bank of India issued directions limiting Alternative Investment Fund (AIF) exposure by banks and NBFCs: 10 % per RE, up to 20 % collectively; deducting subordinated units from regulatory capital; and enforcing provisioning rules for debtor exposures. Earlier approvals and commitments have been grandfathered until the winds-down phase starts in 2026. They are effective 1 January 2026.
HKMA updates IRB validation guidance (CA G 4)
21 Jul 2025 : HKMA issued revisions to Chapter IV of its Supervisory Policy Manual addressing the internal ratings-based (IRB) validation framework, particularly module CA G 4 on risk rating system validation. The objective is to clarify supervisory expectations around:
- Validation methodologies, including benchmarking, periodic review cycles and performance metrics.
- Ongoing model assurance and governance, emphasizing senior management oversight.
- Alignment with Basel standards and consistency in supervisory evaluation of IRB
Gazettal of banking amendment rules to implement Basel crypto-assets standard
11 Jul 2025: Hong Kong: The amendment rules to implement the capital standards and the associated requirements on disclosure and exposure limits promulgated by the BCBS in relation to the prudential treatment of cryptoasset exposures, namely The Banking (Capital) (Amendment) Rules 2025, the Banking (Disclosure) (Amendment) Rules 2025 and the Banking (Exposure Limits) (Amendment) Rules 2025 (collectively referred to as "the amendment rules") have been passed. These rules are scheduled to take effect from January 1, 2026, in accordance with the BCBS timeline.
Americas
United States
Kugler resigns from the Federal Reserve Board
1 Aug 2025: On August 1, Adriana Kugler announced that she will step down from the Fed board effective August 8. Her term would have expired on January 31, 2026. Kugler plans to return to Georgetown University as a professor later this year. President Trump will select a new Governor to complete Kugler’s term. Some speculate that the President will use this seat as a holding slot for his future Chairman. The White House commented the President “will be happy to fill the open slot” but gave no indication on who it might be.
The Agencies posted the fourth EGRPRA notice
25 July 25: The Agencies (OCC FRB and FDIC) issued a notice to comment on the fourth set of topics – banking operations, Community Reinvestment Act (CRA) and capital. The comment period ends in 90 days.
Call Reports (FFIEC 031 041 051) and FFIEC 002) to complete the ASU 2022-02 implementation
11 Jul 2025: On 28 Sep 2023 the Agencies requested comment on a proposal to revise the Call Reports (FFIEC 031, FFIEC 041, FFIEC 051) and FFIEC 002. The proposed revisions included changes to the Call Report and FFIEC 002 report forms and instructions that were in response to the Financial Accounting Standards Board's (FASB) Accounting Standards Update (ASU) 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (ASU 2022-02). This was partially implemented with the December 2024 reporting cycle.
The Agencies are now finalizing instructional revisions related to the length of time that loan modifications to borrowers experiencing financial difficulty would be reported in the Call Report and FFIEC 002 forms. The effective date will be December 31, 2025, unless there are no objections, the changes may be made with September 30, 2025, reporting cycle. The proposal was posted on July 11, and the comment period closes August 11.
