As the current European legislative period is nearing its end with elections in May 2019, banks are eagerly awaiting the conclusion of the final regulatory elements agreed by the G20 in the form of the risk reduction measures (RRM) package.
In the RRM package, banks are still calling for prudential recognition of the European single market and the banking union as a single jurisdiction. They are hoping to take advantage of consolidated supervision and reporting to be able to manage capital and liquidity centrally. This would greatly facilitate an efficient free flow of capital and avoid trapped pools of liquidity in times of stress, as well as alleviating the immense regulatory burden of supervisory reporting to multiple authorities.
