Letter to Commissioner McCreevy on possible changes to the large exposures regime

Summary

1. The European Commission has confirmed that it will introduce a 25% limit of own funds on all interbank (unsecured) exposures, regardless of maturity, and will remove the current exemption for interbank exposures of less than one year’s maturity.  But it is not acting on the advice given by the Committee of European Banking Supervisors to introduce a quantitative threshold (€150 million was the initial proposal) for small credit institutions. 

2. The BSA has written to Commissioner McCreevy voicing its concern and outlining the potentially damaging effects the change could have on small credit institutions, not just building societies.