Minister’s Brief

A further group is reviewing the regulatory treatment of Sovereign Exposures: At a European
level, the exemptions provided under CRD IV/CRR for sovereign debt holdings with regard to
risk weightings and Large Exposure Limits has been a topic of debate. A High Level Working
Group of the Economic & Finance Committee on the Regulatory Treatment of Sovereign Debt
Exposures (HLWG) has been established which is examining the impact of these exemptions
and is considering if the regulatory environment has led to an excessive investment in
sovereign debt with a corresponding risk to financial stability. This group produced a draft
report on 1 April 2016. Ministers had a preliminary discussion of policy options at the
informal Ecofin on 22 April.
Capital Requirements Directive IV /Capital Requirements Regulation - Level 2 measures
Following AGO advice that all measures will require designation, we are working with the
Central Bank to prepare an SI for signature to provide for the designation of these
instruments under the Central Bank Acts.
Financial Services Committee (FSC): Assistant Secretary Aidan Carrigan is Irish representative
on FSC and is also vice-chair.
Capital Markets Union (CMU)
CMU is a key initiative of the European Commission which aims to unlock non-bank sources of
investment across the EU and the rest of the world. Workstreams announced as part of the
CMU package on its publication in September 2015 include: a proposal for a Securitisation
Regulation; a proposal to amend the Capital Requirements Regulation and a public
consultation on Covered Bonds.
- Securitisation Package – this aims to (i) remove stigma and high costs from investors and
issuers; and (ii) remove regulatory disadvantages for simple and transparent securitisations.
Council general approach was agreed in December 2015 and we await a European Parliament
position before trilogues can commence.
- Covered Bonds – The Commission have undertaken a public consultation process to
examine the feasibility of developing a pan-European framework for covered bonds. The
Department and Industry (BPFI) both submitted responses to the consultation. A decision is
awaiting as to the direction the Commission will take on this.
- Prospectus: This is a high priority file for the Dutch Presidency and Council agreement may
take place before the end of the Dutch Presidency in June
Insurance
Review of Policy in the Insurance Sector
The Department has commenced a Review of Policy in the Insurance Sector. This is being
undertaken in consultation with the Central Bank and other Departments and Agencies. The
objective of the Review is to recommend measures to improve the functioning and regulation
of the insurance sector. The first phase of this review is examining the framework for motor
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