Regulatory Alerts2025-01-01
EBA Opinion on Final Draft RTS to Specify Highly Liquid Financial Instruments with Minimal Risk under MiCA
The European Banking Authority issued an opinion rejecting substantive amendments proposed by the European Commission to the final draft Regulatory Technical Standards specifying highly liquid financial instruments under MiCA. The EBA argues that the Commission's proposals, which would allow money market funds and non-HLFI assets in reserves, undermine prudential objectives, create regulatory arbitrage, and increase liquidity and concentration risks. Consequently, the EBA maintains that reserves must be invested exclusively in high-quality liquid assets to ensure immediate convertibility and stability during stress periods.
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