Sector developments and company hires

ECON votes on output floor
The European Parliament's Committee on Economic and Monetary Affairs (ECON) has voted to apply the capital requirements output floor at the consolidated EU level under CRR3, in order to engender comparable risk weights and avoid variations in capital levels. Additionally, the Committee has agreed transitional adjustments for low-risk exposures secured by residential mortgages to mitigate the negative impact the introduction of the output floor would have, until a wider review of the securitisation framework is undertaken. An extension of the transitional period is possible, but will be no longer than four years.

MEPs agreed that a competent authority should be able to address inappropriate distribution of capital among banking groups and propose a capital redistribution.

The stated aim of these proposed changes under the CRR and CRD is to implement Basel 3, while avoiding “a significant increase in overall capital requirements for the EU banking system”. AFME, for one, has welcomed the ECON Committee’s recognition of the important role securitisation plays in financing of the economy.

The European Parliament has also proposed an interim treatment to apply a 1,250% risk weight to crypto assets until 31 December 2024. However, AFME notes that there is no definition of crypto assets in the CRR and therefore the requirement may apply to tokenised securities, as well as the non-traditional crypto assets the interim treatment is targeted at.

“The scope of application should be clarified in the trilogue process to ensure a faithful implementation of the finalised Basel standard to avoid any unintended impact on securities markets during the interim period,” the association comments.

Separately, taking into account the EU’s objective to achieve carbon neutrality by 2050 and the relevant sustainability goals, MEPs agreed to strengthen reporting and disclosure requirements for ESG risk. The CRD makes it compulsory for banks to adopt transitional plans to address ESG risks in the short, medium and long term.

In other news…

EMEA
Marialaura Aymerich has joined MUFG as director, structured finance syndicate. She was previously head of loan sales at SEB, which she joined in January 2003. Before that, Aymerich worked at Bankgesellschaft Berlin and Banca Commerciale Italiana.

North America
Investcorp has appointed Suhail Shaikh as co-head of its private credit business, alongside existing co-head Mike Mauer. Based in New York, Shaikh brings with him approximately US$200m of assets under management and three team members from his previous firm Alcentra, expanding the private credit team to 14 professionals and team-managed assets to approximately US$500m. He replaces Chris Jansen, who will take on an advisory role and retire later this year after ensuring a smooth transition.
Shaikh has over a decade of private credit investment experience and previously led Alcentra’s US private credit business. Prior to that, he worked at SLR Capital Partners, Bank of America, CIBC and JPMorgan.