EBA consults on revised guidelines for limits on shadow banking exposures

The European Banking Authority (EBA) has initiated a public consultation on revised Guidelines concerning limits on exposures to shadow banking entities conducting banking activities outside a regulated framework.

The revised Guidelines aim to align with the updated EU large-exposure reporting framework and support sound risk management and governance practices across financial institutions.

The consultation paper updates the scope of application and the basis for limits by shifting from eligible capital to Tier 1 capital. It also removes the 0.25% materiality threshold to simplify the framework, while maintaining governance requirements and methods for setting exposure limits.

Stakeholders are invited to provide feedback on potential implementation impacts, current practices, and the effects of quantitative limits on lending to shadow banking entities. The consultation also seeks information on how institutions identify exposures, set limits, and manage related risks.

This input will inform policy decisions and broader policy work, including a report on shadow banking entities’ contribution to the Capital Markets Union and an assessment of exposures and limits, due by December 2027.

Comments can be submitted via the EBA consultation page by clicking the “send your comments” button. The deadline 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. Interested stakeholders can register by 17 June 2026 at 16:00 CEST. Dial-in details will be provided to registrants.

All contributions will be published after the consultation unless confidentiality is requested.

The legal basis for this consultation is Article 395(2) of Regulation (EU) No 575/2013 (CRR 3), which mandates the EBA to revise these guidelines by 10 January 2027 and to submit a report to the European Commission by 31 December 2027 on the contribution of shadow banking entities to the Capital Markets Union and related exposures.

Under the CRR, shadow banking entities are non-bank entities performing bank-like credit activities outside regulated frameworks, as specified in binding EBA RTS under Article 394(4). The 2015 guidelines provided initial risk management guidance, and in 2022, the EBA introduced RTS to clarify identification criteria for shadow banking entities.

This update ensures alignment with the latest regulatory framework while maintaining relevant supervisory and risk management provisions.