Liechtenstein launches consultation on implementation of EU banking package

The consultation period ends on 30 April 2021. The EU banking package is currently in the process of being incorporated into the EEA Agreement. The amendments to Liechtenstein law are to enter into force on 1 March 2022, independently of the EEA incorporation procedure.

Implementation of CRD5 requires amendments to the Banking Act (BankG), the Banking Ordinance (BankV), and numerous ancillary laws. The proposal is also intended to carry out other necessary amendments to the BankG, including an adjustment of the hierarchy of norms between the Banking Act and the Banking Ordinance. This concerns in particular the provisions on bank transactions, capital buffers, and owner control. The provisions will also be aligned with European supervisory standards such as those relating to governance, in particular transactions of governing bodies and requirements for internal audits and rules governing outsourcing.

The Liechtenstein Bankers Association (LBA) welcomes timely implementation of the EU banking package in Liechtenstein. With the new provisions, the Liechtenstein banking centre meets the international Basel III standards of the Basel Committee on Banking Supervision (BCBS), with regulation on a level playing field with the rest of the European single market. With implementation of the EU banking package, Liechtenstein's traditionally high level of financial stability and reputation will be further strengthened, and the comparability of compliance with prudential requirements will be increased. The LBA also hopes that the principle of proportionality will finally be implemented, allowing smaller banks in particular to benefit from risk-adequate simplifications. The LBA also expects that a Government proposal on amendment of the Bank Recovery and Resolution Directive (EU) 2019/879 contained in the EU banking package can also be circulated for consultation soon.