The European Banking Authority (EBA) published numerous regulatory updates for credit institutions. Many of these updates either relate directly to the implementation of the final Basel III rules in European Union (EU) or, in other ways, concern the implementation of these rules by banks.
Below is a summary of the recent key regulatory publications for banks, as part of which the EBA published:
consultation paper amending the Implementing Regulation on the joint decision process for internal model authorization under the Capital Requirements Regulation (CRR). The revised implementing technical standards incorporate changes to the EU legal framework, including the reduced scope of application for internal models under CRR3 and the updated framework on the general functioning of supervisory colleges. This consultation runs until October 16, 2024.
updated list of other systemically important institutions (O-SIIs) in EU, which, together with global systemically important institutions (G-SIIs), are identified as systemically important. A total of 178 banks have been identified as systemically important in 2023. This list is based on year-end-2023 data and includes the overall score calculated according to the EBA Guidelines and the capital buffer rate that the relevant authorities have set for the identified O-SIIs.
updated reporting framework via the implementing technical standards on supervisory reporting by including new or amended CRR3 requirements on the output floor, credit risk, market risk, credit valuation adjustment (CVA) risk, leverage ratio, and the transitional treatment of exposures to crypto-assets. Also published is an updated mapping tool between the revised disclosure templates published on 21 June 2024 and the reporting templates, along with a summary of all the Pillar 3 disclosure requirements.
technical package for version 3.5 of its reporting framework. This package provides the standard specifications that include the validation rules, the Data Point Model (DPM) and the XBRL taxonomies to support various reporting obligations, including those related to market risk, diversity benchmarking, templates under Digital Operational Resilience Act (DORA), and reporting and disclosure technical standards on minimum requirements for own funds and eligible liabilities and total loss-absorbing capacity (MREL/TLAC).
public call for expression of interest to set up the Reporting Contact Group (RCG). This call was launched by the Joint Bank Reporting Committee (JBRC), which was jointly set up by the EBA and the European Central Bank (ECB). The RCG will bring together stakeholders with expertise on banks’ regulatory reporting with the aim to serve as a regular channel for cooperation and exchange of views and best practices with authorities. The deadline for application is August 01, 2024.
consultation on the draft regulatory technical standards to specify the conditions and the criteria to assess whether the CVA risk exposures arising from fair-valued securities financing transactions are material, as well as the frequency of that assessment. The concept of materiality set out in the draft standards will determine whether fair-valued securities financing transactions can be exempted from own funds requirements for CVA risk. The feedback period ends on October 08, 2024.
informal consultation its draft methodology, templates, and guidance for the 2025 EU-wide stress test. EBA expects to publish the final methodology at the end of 2024, launch the exercise in January 2025, and release the results by the end of July 2025.
statement on the European Supervisory Examination Program (ESEP) for 2025, which identifies key topics for heightened supervisory attention across EU. The ESEP is aimed at driving supervisory convergence by providing competent authorities with a single set of priorities for implementation in 2025. The key topics include testing and adjusting to increasing economic and financial uncertainties, digital challenges (ICT risk management and operational resilience), and transitioning toward Basel III and the EU banking package implementation
report on supervisory convergence that notes the EU-wide consistent implementation of 2023 priorities in supervisory work programs. The report highlights the need for further consistency in the identification and treatment of risks covered by Pillar 2 requirements.
peer review report on guidelines on the application of the definition of default. The review found supervision in the areas of internal ratings-based approach and standardized approach for credit risk to be good though the report identified a small number of follow-up measures/recommendations for certain competent authorities as well as best practices that would be of benefit for other competent authorities to adopt.
statement that clarifies the operational application of CRR 3 in the area of credit risk modeling for the internal ratings-based approach, also welcoming the entry into force of the new European Banking Package that implements the final Basel III framework into EU regulation.
Related links
LEARN MORE
Find out how we can help
Moody’s brings together data, experience, and best practice capabilities, with our specialized and agile intelligence.