The European Banking Authority has launched a public consultation on revised Guidelines for setting limits on institutions’ exposures to shadow banking entities carrying out banking activities outside a regulated framework. The draft revision primarily aims to align the Guidelines with the updated EU large-exposure reporting framework and the binding criteria for identifying shadow banking entities used for large-exposure reporting. The proposal updates scope and definitions to reflect the Capital Requirements Regulation and the Regulatory Technical Standards in force since January 2024, including by deleting elements now covered by the harmonised legal framework. It also shifts the basis for limits from eligible capital to Tier 1 capital, while keeping existing governance expectations and the principal and fallback approaches for setting limits, including the fallback link to the general large exposures regime under Article 395 of the Capital Requirements Regulation. The EBA is also seeking evidence on current identification, limit-setting and risk-management practices, and on potential implementation impacts, including any effects from quantitative limits on lending to shadow banking entities, with responses intended to inform both the final Guidelines and broader work feeding into a European Commission report and assessment expected in December 2027. Comments are due by 9 July 2026 at 23:59 CEST. A virtual public hearing is scheduled for 25 June 2026 from 10:00 to 12:00 CEST, with registration requested by 17 June 2026 at 16:00 CEST.
European Banking Authority 2026-04-09
European Banking Authority consults on revised guidelines moving limits on institutions’ exposures to shadow banking entities to Tier 1 capital and removing the 0.25% materiality threshold
The European Banking Authority has launched a consultation on revised Guidelines for setting limits on institutions’ exposures to shadow banking entities, aligning them with the updated EU large-exposure reporting framework and binding criteria for identifying such entities. The proposal updates scope and definitions to reflect the Capital Requirements Regulation and related Regulatory Technical Standards, shifts the basis for limits from eligible capital to Tier 1 capital, and retains existing governance expectations and the principal and fallback approaches for setting limits.