Featured Product

    ECB Updates Q&A on AnaCredit Regulation, Makes Other Announcements

    April 13, 2022

    The European Central Bank (ECB) published the results euro area bank lending survey, updated the questions and answers (Q&A) on AnaCredit Regulation, and issued an opinion on the proposed directive on measures for a high common level of cybersecurity across the European Union.

    The results of the bank lending survey show that credit standards for loans or credit lines to enterprises tightened in the first quarter of 2022 mainly due to perceptions of increased risk and decreased risk tolerance, in the context of high uncertainty, supply chain disruptions and high energy and input prices. However, for the second quarter of 2022, banks expect a considerably stronger net tightening of credit standards for loans to firms, likely reflecting the uncertain economic impact of the war in Ukraine and the anticipation of less accommodative monetary policy. Also, banks reported, on balance, a continued increase in firms’ demand for loans or drawing of credit lines in the first quarter of 2022. Loan demand was driven by a strong positive impact of financing needs of firms for working capital, reflecting supply chain disruptions as well as precautionary inventories and liquidity holdings. A total of 151 banks were surveyed and the results reported in the April 2022 survey relate to changes observed in the first quarter of 2022 and expected in the second quarter of 2022, unless otherwise indicated. 

    As part of AnaCredit Q&A update, ECB clarified how banks should report the attribute “Type of impairment” for instruments that were credit-impaired at initial recognition. According to the AnaCredit Regulation, the data attribute “Type of impairment” for institutions applying IFRS only includes impairment stages 1, 2, and 3 in accordance with European Banking Authority (EBA) reporting framework 2.8. However, in June 2020, the IFRS category “purchased or originated credit-impaired financial asset” (POCI) was included in EBA reporting framework 3.0. Given the new inclusion, ECB clarified that there is no specific category that allows POCIs to be captured explicitly under the data attribute “Type of impairment”. Instead, the value “Stage 3 (IFRS)” is reported by banks applying IFRS for all POCIs which are impaired at the reference date, while the value “Stage 2 (IFRS)” is reported when the POCIs are not impaired at the reference date. Moving forward, the AnaCredit reporting schemes will be updated by introducing a new value “POCI (IFRS)” for the data attribute “Type of impairment” to distinguish POCIs from other instruments subject to impairment in accordance with the EBA reporting framework methodology. The first reference date as of which the new category “POCI (IFRS)” is to be used is September 30, 2022. ECB also clarified that for reference dates up to and including June 30, 2022, the POCIs are to be classified in “Stage 2 (IFRS)” or “Stage 3 (IFRS)”, depending on whether the POCI is impaired or not.

    In its opinion, ECB strongly supports the objectives of the proposed directive on measures for a high common level of cybersecurity across the European Union. The key objectives are to increase the level of cyber resilience across all relevant sectors, reduce inconsistencies across the internal market, and improve the level of situational awareness and the collective capability to prepare and respond by ensuring efficient cooperation in the European Union. However, ECB recommends changes to the proposed directive and with respect to these changes a specific drafting proposal has been set out in a technical working document, which is attached to the ECB Opinion. The key recommendations of ECB are as follows:

    • Member states must designate one or more competent authorities responsible for the management of large-scale incidents and crises.
    • The competent authorities should inform the Oversight Forum, established under digital operational resilience for the financial sector (DORA), when exercising their supervisory and enforcement powers in relation to an essential entity designated as a critical Information and Communications Technology (ICT) third-party service provider under DORA.
    • The competent authorities designated under DORA, including the ECB, should participate in the European Cyber Crises Liaison Organization Network (EU-CyCLONe), when large-scale cybersecurity incidents and crises affect the financial sector.
    • Information exchange should take place where there are clearly established classification and information-sharing mechanisms, coupled with adequate safeguards to ensure confidentiality.
    • Member states should continue to include the financial sector in their respective cybersecurity strategies. Indicatively, as part of their national cybersecurity strategies, member states should adopt policies addressing cybersecurity in the supply chain for ICT products and services used by entities for the provision of their services. The national cybersecurity strategies should be consistent with the regulatory framework that emanates from DORA.

     

    Related Links

     

    Keywords: Europe, EU, Banking, Lending, Credit Risk, Basel, CRR, IFRS, AnaCredit, Q&A, Reporting, Operational Resilience, Opinion, DORA, Incident Reporting, Third-Party Risk, Cyber Risk, Regtech, EBA, ECB

    Featured Experts
    Related Articles
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    News

    IOSCO Welcomes Work on Sustainability-Related Corporate Reporting

    The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)

    September 15, 2022 WebPage Regulatory News
    News

    BoE Allows One-Day Delay in Statistical Data Submissions by Banks

    The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.

    September 14, 2022 WebPage Regulatory News
    News

    ACPR Amends Reporting Module Timelines Under EBA Framework 3.2

    The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.

    September 14, 2022 WebPage Regulatory News
    News

    ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies

    The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)

    September 13, 2022 WebPage Regulatory News
    News

    APRA to Modernize Prudential Architecture, Reduces Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.

    September 12, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8514