EBA Updates Lists of Entities for Use in Capital Calculations under SA
EBA updated the list of regional governments and local authorities (RGLAs) that may be treated as central governments for the calculation of capital requirements. Also updated was the list of public-sector entities (PSEs) that may be treated as central government, regional government, or local authorities. These lists are intended to supplement the requirements set out in Articles 115 and 116(4) of the Capital Requirements Regulation or CRR, which specifies the treatment of exposures to central government, regional governments, or local authorities across EU as part of the standardized approach—also known as SA—for credit risk.
The list of RGLAs includes the regional governments and local authorities that are treated as central governments under the standardized approach due to their reduced risk level. As a result of this treatment, exposures to the regional governments and local authorities included in the list will qualify for the same risk-weight as their respective central government. Compared to the previous version, the updated list includes amendments to the regional governments and local authorities in Austria, Finland, the Netherlands, and Sweden. Additionally, the list of PSEs includes the PSEs that are treated as regional governments, local authorities, or central governments under the standardized approach due to their reduced risk level. As a result of this treatment, exposures to the PSEs included in the list will qualify for the same risk-weight as their respective regional government, local authority, or central government. Compared to the previous version, the updated list includes amendments to the PSEs in Greece, Germany, Luxembourg, Malta, Portugal, Slovenia, and Slovakia and updates to the names of PSEs in Denmark and Spain. Both the lists are compiled using information provided by the competent authorities and are based on the classification used in each country. The approaches and eligibility criteria for PSEs and regional governments and local authorities, therefore, differ from country to country in many cases.
Related Links
- Press Release
- List of Regional Governments and Local Authorities (XLSX)
- List of Public Sector Entities (XLSX)
- Updated Lists for SA on Credit Risk
Keywords: Europe, EU, Banking, CRR, Basel, Credit Risk, Regulatory Capital, Standardized Approach, Public Sector Entities, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Nick Jessop
Scenario modeling expert; risk management specialist; quantitative financial modeler
Previous Article
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.