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    NBB Issues Reporting and Accounting Guidance to Ease COVID-19 Impact

    April 14, 2020

    NBB announced certain measures to address the impact of COVID-19 pandemic. The key measures relate to reducing reporting burden on institutions, provisioning of expected credit loss provisioning under IFRS 9, and prevention of money laundering and the financing of terrorism (AML/CFT). NBB is informing the financial institutions that fall under its relevant supervisory powers about its decision to extend, to August 31, 2020, the deadline for communicating the 2019 annual activity report of Money Laundering and Terrorist Financing Prevention Officer and for replying to the 2020 periodic questionnaire on AML/CFT.

    Earlier, ECB had provided guidance on the use of forecast to avoid excessively procyclical assumptions in the expected credit loss (ECL) estimations during the COVID-19 pandemic. NBB considers that this guidance is also relevant for the less significant institutions that draw up consolidated accounts on the basis of IFRS accounting standards and are faced with the same problems. NBB, therefore, expects these institutions to take the ECB recommendations into account in the assessment and provisioning of their expected credit losses. Additionally, NBB announced the following key decisions in accordance with the recent statements from EU authorities on reducing the reporting burden on institutions:

    • NBB decided to grant the less significant institutions an additional month to provide it with the reports required at the European level (including the ECB-specific reports, such as the FINREP solo reports, which were to be submitted between March and May 2020. This extension does not apply to the reporting in relation to the Liquidity Coverage Ratio (LCR) and the Additional Liquidity Monitoring Metrics (ALMM).
    • In respect to resolution reporting, for less significant institutions that do not conduct cross-border activities and for stockbroking firms falling under the remit of NBB, one-month extension of the reporting deadline—that is, until May 31, 2020—will be granted if requested by the institution.
    • Where appropriate, an extension can be granted for the Commission Implementing Regulation 2018/1624 templates, the Critical Function Report (CFR), and the Financial Market Infrastructures Report (FMIR).
    • In accordance with the EBA Communication, no extension can be granted for tables containing information on the liability structure. For the Liability Data Report (LDR), Additional Liability Report (ALR), and certain other tables (Z 02.00 Liability Structure, Z 03.00 Own funds requirements, Z 04.00 Intragroup financial connectedness, and Z 05.02 Major counterparties), the deadline of April 30 remains in place. 
    • For national reporting between March 2020 and May 2020, NBB decided to grant institutions one additional month to comply with certain reporting requirements. These requirements involve national quantitative prudential reports (including reporting on interest rate risk arising from non-trading activities) and various national qualitative prudential reports (except those specifically intended for AML), unless expressly stated otherwise to individual institutions by NBB.

    In the future, NBB will, in accordance with a potential decision by EBA and ECB, make a decision regarding the deadlines of reports to be submitted from June 2020. 

     

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    Keywords: Europe, Belgium, Banking, COVID-19, Reporting, Less Significant Institutions, IFRS 9, Credit Risk, AML/CFT, Liquidity Risk, Expected Credit Loss, FINREP, Resolution Reporting, NBB

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