EC Extends Transitional Period of Capital Requirements for Banks' Exposure to CCPs (with Lofchie Comment)
The European Commission ("EC") adopted an implementing act that extends the transitional period for capital requirements for EU banking groups' exposures to central counterparties ("CCPs") under the Capital Requirements Regulation.
According to EU Commissioner Jonathan Hill, the decision to adopt the act "will give the market the legal certainty it needs for the next six months," while the EC continues to attempt to solve the "underlying issues."
The current transitional period expires on June 15, 2015. The implementing act extends it for an additional six months, at the end of which the transitional period will expire on December 15, 2015.
Lofchie Comment: The extension may buy enough time for the CFTC and European regulators to make peace so that Europe will grant recognition to U.S. central counterparties.