On Friday, the global standard setter began seeking feedback on integrating how such exposures are treated inside the European banking union into the framework for global systemically important banks. It had flagged earlier this year that a consultation was forthcoming, and the comment window will end on Jan. 14.
ASTRA is a technical rule that grants European banks comparatively preferential capital treatment for cross-border exposures inside the bloc's banking union versus other overseas activities. Euro area supervisors pressed for the arrangement when it was agreed in 2022, arguing that the banking union should be treated as a single market, according to people familiar with the matter.
Bloomberg reported late last year that the U.S. Federal Reserve aims to roll back the practice. The treatment benefits banks with large euro area cross-border exposures, such as BNP Paribas SA.
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This review centers on the treatment of cross-border exposures inside the European banking union for G-SIBs, and the deadline for submissions is Jan. 14. Investors with exposure to banks that have significant euro area cross-border business may want to watch whether ASTRA's treatment is incorporated into the framework or reconsidered.
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