At the end of each month, the SAFE Regulatory Radar highlights a selection of important news and developments on financial regulation at the national and EU level.
European Banking Authority finalizes draft standards on MREL reporting
On 12 September 2025, the European Banking Authority (EBA) published the final draft Implementing Technical Standards (the draft ITS) amending Commission Implementing Regulation (EU) 2021/622 (previously reported on the Regulatory Radar, April 2021). The draft ITS upgrades how resolution authorities report Minimum Requirement for Own Funds and Eligible Liabilities (MREL) decisions to the EBA. MREL mandates banks to gather sufficient debt and/or equity buffers to ensure enough loss-absorbing capacity in financial distress. This amendment aims to improve convergence monitoring in MREL settings across the EU while reducing unnecessary burden on authorities.
The final draft shifts the reporting framework from an annual to a semi-annual cycle. MREL applicable on 30 June must be reported by 16 September, and MREL applicable on 31 December must be reported by 18 March. This timing aligns MREL-decision data with the EBA’s semi-annual MREL dashboard and broader risk assessment work. The draft also strengthens coverage of discretionary elements used in setting MREL and streamlines reporting for selected data fields. To support consistent supervisory assessment, the ITS expands reporting on key discretionary choices by resolution authorities, including any adjustment to the 8% of Total Liabilities and Own Funds (TLOF) minimum subordination threshold.
Other targeted amendments align the reporting framework with recent legal changes, especially Directive (EU) 2024/1174 (“Daisy Chain Act”). Under the “Daisy Chain Act”, liquidation entities are generally outside MREL unless a loss-absorption add-on is applied. The final draft removes the simplified reporting option for zero-recapitalization cases, introduces a new breakdown to identify internal MREL at the sub-consolidated level, and deletes several fields (e.g., the “reference date” for Pillar 2/CBR notifications and “after-resolution” balance-sheet data). Data may also be reported in the original currency, enhancing usability. The draft ITS will be submitted to the European Commission for endorsement, with application by resolution authorities expected from 31 December 2025.
European Central Bank regulation on reporting supervisory financial information
On 11 September 2025, the European Central Bank (ECB) published Regulation (EU) 2025/31 which amends Regulation (EU) 2015/534 on the reporting of supervisory financial information. The new regulation updates references and aligns the reporting framework with the latest EBA-developed templates in Commission Implementing Regulation (EU) 2024/3117.
Currently, less significant credit institutions (including those with total assets of €3 billion or less) face reduced reporting. With the amendments, the ECB identifies the need for additional data points from these institutions to strengthen oversight and improve the comparability of the supervisory review’s outcomes. The regulation enters into force on the twentieth day after publication in the Official Journal and applies from 30 December 2025.
EU Covered Bonds: European Banking Authority calls for harmonization and broader scope
On 23 September 2025, the EBA published its advisory response to the European Commission’s Call for Advise (CfA) on the review of the EU covered bond framework. This review, mandated by the Covered Bond Directive (CBD), assesses the functioning of the harmonized rules introduced in 2021 and considers whether adjustments are needed to integrate Europe’s covered bond markets further. The EBA’s advice concludes that the current framework is broadly fit for purpose, but it recommends targeted enhancements to promote a deeper and more integrated EU covered bond market. Key recommendations include further harmonizing national covered bond regimes to reduce market fragmentation while preserving the directive’s principle-based flexibility. The EBA suggests strengthening investor protection by improving transparency and safeguards across all national frameworks, so investors receive more transparent and comparable information on cover pools and risks.
Furthermore, EBA advises simplifying and streamlining the EU rules by better aligning the Covered Bond Directive with bank capital regulations in the Capital Requirements Regulation (CRR). This could involve clarifying the eligibility of covered bonds for specific regulatory treatments and ensuring consistency between the covered bond definitions and the prudential rules. Importantly, the EBA also floats the idea of expanding the framework’s scope through a third-country equivalence regime, allowing covered bonds issued under equivalent standards in non-EU countries to be recognized in the EU. This could broaden the investor base and market scope for EU-covered bonds while maintaining high standards. The EBA’s advice follows an in-depth assessment of how the directive has been implemented across member states, considering issues like SME loan-backed covered bonds, the role of green covered bonds, and the treatment of environmental, social, and governance (ESG) risks in cover pools.
The European Commission will consider these recommendations as it prepares a report for the European Parliament and Council on the covered bond framework’s performance. Any legislative follow-up would aim to fine-tune the rules to support a more harmonized and robust covered bond market across the EU, enhancing funding opportunities for banks and preserving the strong protection traditionally afforded to covered bond investors.
Updates:
- On 17 September 2025, the Council of the EU released the text of the draft regulation of the European Parliament and of the Council amending the Central Securities Depositories Regulation (CSDR) to move the standard settlement period for most securities executed on EU trading venues from two business days (T+2) to latest the next business day (T+1). The respective provisional agreement between the Council and the European Parliament was reported on the SAFE Regulatory Radar in June 2025.
- The European Securities and Markets Authority (ESMA) issued updated reporting instructions and an XML schema (v1.2.0) for the weekly reporting of commodity derivatives positions under the Markets in Financial Instruments Directive II (MiFID II). The updated XML schema and reporting instructions include changes taken from MIFID II, for example, introducing two weekly reports and excluding spot emission allowances from position reporting. In addition, they introduce the harmonization of reporting units for energy derivatives among other amendments to ITS 4. The new schema/instructions will apply from 1 April 2026. Previous updates were discussed on the SAFE Regulatory Radar in January 2021.
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Sara Fadavi is Financial Policy Analyst at the SAFE Policy Center.
