ECB Guideline and Recommendation on the exercise of Options and Discretions available in Union Law for LSI’s

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The European banking regulations (CRD, CRR, LCR, DR) contain several provisions that give supervisory authorities discretionary leeway in interpreting and applying regulatory requirements. This factsheet explains how DNB deals with these options and discretions.

Published: 26 April 2017

Options and discretions applied generically

With regard to a number of options and discretions, DNB has opted for generic application. This generic application is laid down in the Regulation on specific provisions of the CRD and the CRR. When exercising these options and discretions, DNB observes the ECB Guidelines where relevant (Guideline (EU) 2022/508 and Guideline (EU) 2017/697 of the European Central Bank).

The chapters of the Regulation on specific provisions of the CRD and the CRR have varying scopes of application. Chapter 2 contains provisions relating to options and discretions of a macro-prudential nature and applies to all banks with registered offices in the Netherlands. Chapter 3 contains provisions relating to options and discretions of a micro-prudential nature and applies only to less significant institutions (LSIs) with registered offices in the Netherlands.

Options and discretions applied on a case-by-case basis

A relatively large number of options and discretions are not suitable for generic application. DNB therefore decides on a case-by-case basis whether or not to apply these options and discretions. In doing so, DNB observes the ECB's recommendations (Recommendation (EU) 2022/13 and Recommendation (EU) 2017/10 of the European Central Bank). Specifically, this means that DNB observes the ECB Guide on options and discretions available in Union law when applying options and discretions on a case-by-case basis.

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