The European Banking Authority (EBA) launched a consultation (to run until 17 January 2020) on draft guidelines (GL) on the application of the structural foreign-exchange (FX) provision, which identify criteria to assist competent authorities (CAs) in their assessment of the structural nature of an FX position and whether such a position has been taken with the aim of hedging the capital ratio. The GL set objective criteria that CAs should consider when assessing whether the conditions set out in Article 352(2) of the Capital Requirements Regulation (CRR) for receiving the permission to exclude a foreign-exchange position from the net open position in the foreign currency are met. The consultation paper (CP) reflects the results of the EBA discussion paper on structural FX from June 2017 and the final Basel III market-risk framework from January 2019.

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