Last week, the European Banking Authority (“EBA”) issued two significant consultation papers proposing amendments to its internal governance guidelines and bank resolution planning regulatory technical standards. The EBA also issued draft regulatory technical standards on the CRR prudential treatment of unfinished property. Below, we outline the key proposed changes from these consultations and the eligibility conditions set out in the draft RTS.
1. Revised Guidelines on Internal Governance
Through its consultation dated 7 August 2025, the EBA published a marked-up versions of its guidelines on internal governance (the “Guidelines”) highlighting proposed revisions. Key changes to the Guidelines include:
- third-country branches subject to Directive 2013/36/EU (as amended) are brought within scope of the Guidelines and ought to comply with the Guidelines subject to the principle of proportionality;
- credit institutions ought to draw up, maintain and update individual statements setting out the roles and duties of each member of their management body;
- ESG risk ought to integrated into credit institutions’ governance and risk frameworks.
2. RTS on ‘Equivalent Mechanism’ for Unfinished Property
The EBA, through the draft RTS issued on 6 August 2025, sets out what constitutes an ‘equivalent legal mechanism in place to ensure that the property under construction is completed within a reasonable timeframe’ under article 124 of the CRR (as amended)
In broad terms, the draft RTS provides that a completion guarantee provided by a protection provider meeting all conditions set out in article 2 of the RTS and where the guarantee meets all the conditions set out in article 3 of the RTS qualifies as an ‘equivalent legal mechanism’ for the purposes of article 124(3)(a)(iii)(2) of the CRR.
Key conditions include:
- The protection provider must be a credit institution or an insurance undertaking with a risk weight that does not exceed 20% for comparable direct exposures under the Standardised Approach for credit risk;
- the completion guarantee is required to cover all housing units in the project;
- as soon as it is no longer ensured that the construction of the immovable property protected by the completion guarantee will be finished within a reasonable time frame, the protection provider is required to pay out the financing entity or finance completion itself;
- the completion guarantee shall not have a fixed duration and shall apply at least until completion of the property under construction.
3. Consultation on the amended RTS on resolution plans, resolvability assessments and resolution colleges
On 5 August 2025, the EBA launched a consultation on draft RTS covering the content of resolution plans and group resolution plans, the assessment of resolvability and the operational functioning of resolution colleges under Directive 2014/59/EU. The proposed amendments aim to streamline resolution planning by removing non-essential details and eliminating duplication, with the intention of making resolution plans more operational to enhance implementation readiness.
For more information on the proposed changes feel free to get in touch with Kyle Debattista.
