EBA · 2024_7112 Rejected question

Article 161(8) CRD

Regulation
Directive 2013/36/EU (CRD)
Article
161(8)
Topic
Other issues
Submitted by
Other
Submitted
2024-06-16
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Question

Has the EBA received a mandate from the Commission to explore whether Islamic financial sector entities are adequately covered by the CRD and the CRR? If so, has the EBA completed the report and provided a legislative proposal to the European Parliament and to the Council? If not, does the EBA have the authority to produce a report without a mandate from the Commission?

Background

There is currently uncertainty with regards to whether Islamic financial sector entities are adequately covered by the CRD, the CRR, and the DGSD of the EU Single Rulebook (and also the CCD).  For example, Islamic banks could avoid classification as a 'credit institution' by structuring deposit-taking accounts in such a way as to prohibit the granting of credits on their own account (while still retaining some of the benefits of treating deposits as their own credit). It is also unclear how to classify sukuk for the purposes of capital adequacy, and it is unclear which Islamic finance assets qualify as HQLA assets (and what haircuts should be applied).
No answer published yet.

Original source: European Banking Authority, Q&A ID 2024_7112

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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