European Banking Authority issues prudential consolidation report with legislative recommendations and final guidelines on identifying ancillary services undertakings

The European Banking Authority published a report on prudential consolidation under the Capital Requirements Regulation (CRR) and final Guidelines on ancillary services undertakings (ASUs), aiming to improve the efficiency and proportionality of the EU consolidation framework and to promote more consistent supervisory application across Member States. The prudential consolidation report provides targeted recommendations intended to support potential European Commission legislative adjustments and clarifies areas where EBA work has identified implementation challenges. It focuses on simplifying sub-consolidation for groups with multiple consolidation layers, improving alignment with accounting standards (both for consolidation scope and methods), refining the definition of control to support consistent interpretation across jurisdictions, and clarifying how to determine the consolidation perimeter in cases involving the CRR “Danish compromise” (Article 49) when an insurance undertaking in a bank-led financial conglomerate acquires a financial institution. The ASU Guidelines specify criteria for identifying activities that are a “direct extension of banking”, “ancillary to banking”, or “other similar activities”, with examples including operational leasing, property ownership or management, and data processing services, and they also address innovative and digital business models such as fintech and technology-driven services. The report and Guidelines were developed under Articles 18(10) and 4(5) of Regulation (EU) No 575/2013, respectively, with the ASU Guidelines marked as final and awaiting translation into the EU official languages.