The EBA consults on revised Guidelines on limits on exposures to shadow banking entities under the Capital Requirements Regulation

The European Banking Authority (EBA) today launched a public consultation on revised Guidelines on limits on exposures to shadow banking entities carrying out banking activities outside a regulated framework. The revised Guidelines aim to align with the updated EU large-exposure reporting framework and to support sound risk management and governance practices across institutions.

The consultation paper aligns the Guidelines with the revised regulatory framework following the entry into force, in January 2024, of the Regulatory Technical Standards (RTS) specifying criteria to identify shadow banking entities for large-exposure reporting. It updates the scope of application and the basis for limits by moving from eligible capital to Tier 1 capital, while preserving existing governance requirements and the primary and fallback methods for setting exposure limits. The proposal also removes the 0.25% materiality threshold to simplify the framework.

The consultation invites feedback on potential implementation impacts. It also gathers input on current practices and on the possible effects of quantitative limits on lending to shadow banking entities. In addition, it requests information on how institutions identify exposures to shadow banking entities, set limits, and manage related risks.

This input will support policy decisions when finalising the Guidelines and to inform broader policy work on shadow banking entities feeding into (i) a report on the contribution of shadow banking entities to the Capital Markets Union and (ii) an assessment of Institutions' exposures and limits to shadow banking entities, expected to be delivered in December 2027.

Consultation process

Comments to the consultation paper can be sent by clicking on the "send your comments" button on the EBA's consultation page . The deadline for the submission of comments is 9 July 2026 at 23:59 CEST.

The EBA will hold a virtual public hearing on 25 June 2026 from 10:00 to 12:00 CEST. The EBA invites interested stakeholders to register using this link by 17 June 2026 at 16:00 CEST. The dial-in details will be communicated to those who have registered for the meeting.

All contributions received will be published following the end of the consultation, unless requested otherwise.

Legal basis

Article 395(2) of the Regulation (EU) No 575/2013 (CRR 3) mandates the EBA to revise the Guidelines on limits on exposures to shadow banking entities that carry out banking activities outside a regulated framework by 10 January 2027. It also mandates the EBA, to submit a report to the European Commission on the contribution of SBEs to the Capital Markets Union and on institutions' exposures to such entities, assessing in particular the appropriateness of aggregate or tighter individual limits to those exposures, taking due account of the regulatory framework and business models of such entities by 31 December 2027.

Background

Under the CRR, a shadow banking entity is any non-bank entity that performs bank-like credit intermediation activities but is not subject to equivalent prudential regulation and supervision, as specified in binding EBA RTS under Article 394(4).

The EBA Guidelines on limits concerning exposures to shadow banking entities, first issued in 2015, set out guidance for institutions' risk management and limits with respect to exposures to entities providing banking activities outside the regulated framework. Building on these original guidelines, and when further mandated by Article 394(2) of CRR2 to operationalise institutions' reporting obligations of their largest exposures to shadow banking entities on a consolidated basis, the EBA delivered in 2022 RTS on the criteria for the identification of shadow banking entities (link), thereby introducing a legally binding framework that clarifies the criteria for identifying shadow banking entities.

This update aims to ensure alignment with this regulatory framework while maintaining the complementary provisions that remain relevant for supervisory and risk management purposes.