On October 20, 2022, the EBA published its finalized proposals on the regulation of Interest Rate Risk in the Banking Book (IRRBB). Three proposals have been published, of which the guidelines on interest rate and credit spread risks is applicable from June 30, 2023, and partially from December 31, 2023. The other two are RTS drafts on the standardized approach and supervisory outlier tests, which are still awaiting adoption by the European Commission. Parallel to the supervisory developments, the interest rate environment has also shown a strong transformation in the recent period, with higher interest rates than at the beginning of the year in all major economies. Adaptation to new market and regulatory conditions is expected to require significant efforts for institutions.
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