The European Council adopted amendments to the EU Capital Requirements Regulation that make permanent the current transitional treatment of certain short-term securities financing transactions (SFTs) in banks’ net stable funding ratio (NSFR) calculations, aiming to support market liquidity and align EU banks’ competitive position with major non-EU jurisdictions. The updated regime keeps in place the lower ratio levels used for these SFTs in the NSFR, avoiding the scheduled increase that would otherwise have applied from 28 June 2025. The Council linked the approach to maintaining liquidity in markets such as sovereign bonds and repo, noting that several major non-EU jurisdictions already apply lower permanent SFT factors than those set out in the Basel standards. The amendments will be published in the EU’s Official Journal and apply from 29 June 2025. The European Banking Authority will monitor and report on the impact of the changes every five years.
European Council 2025-06-12
European Council makes permanent lower NSFR factors for certain short-term securities financing transactions in EU banking rules
The European Council has amended the EU Capital Requirements Regulation to permanently maintain the current transitional treatment of certain short-term securities financing transactions (SFTs) in banks’ net stable funding ratio (NSFR) calculations. This aims to support market liquidity and align EU banks' competitive position with major non-EU jurisdictions. The amendments will be published in the EU Official Journal and take effect on 29 June 2025.