EBA published 12 indicators and updated the underlying data from the 37 largest institutions in EU whose leverage ratio exposure measure exceeds EUR 200 billion. This end-2019 data contributes to the internationally agreed basis on which a smaller subset of banks will be identified as global systemically important institutions (G-SIIs), following the final assessments from BCBS and FSB. For the first time this year, EBA is including the Legal Entity Identifier (LEI) of each institution, which will facilitate peer review exercises and broader data analyses.
A stable sample of 33 institutions shows that the aggregate amount for total exposures, as measured for the leverage ratio, increased during 2019 by 3.2% and stood at EUR 25.6 trillion at the end of 2019. Underwriting and payments activities increased by 11.6% and 6.1%, respectively, while aggregate values for trading and available-for-sale-securities increased by 7.6%. Similarly, total value for assets under custody increased by 6.2%, reaching the highest combined value since 2013 (EUR 30 trillion). Conversely, the outstanding amount for level 3 assets decreased by 1% from the end of 2018, mildly offsetting the significant increase observed last year. EBA will act as a central data hub in the disclosure process and will update this data annually in a user-friendly platform, to aggregate it across EU.
The EBA implementing technical standards and guidelines on disclosure of G-SIIs define uniform requirements for disclosing the values used during the identification and scoring process of G-SIIs, in line with the internationally agreed standards developed by FSB and BCBS. The regulatory technical standards on the specification of the methodology for the identification and definition of subcategories of G-SIIs, and the implementing technical standards and guidelines on disclosure of G-SIIs have been developed in accordance with Capital Requirements Directive (CRD IV) on the basis of internationally agreed standards. The identification of a G-SII, which leads to a higher capital requirement, falls under the responsibility of national competent authorities and will be updated by December 15 every year. The identification will be based on the disclosure of global denominators and G-SIB exercise results, which are expected to be published by BCBS and FSB in November each year. The higher capital requirement will then apply after about one year from the publication by competent authorities of banks' scoring results, thus allowing institutions enough time to adjust to the new buffer requirement.
Keywords: Europe, EU, Banking, CRD IV, Systemic Risk, G-SII, LEI, Disclosure, Regulatory Capital, Basel, FSB, EBA
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.
ECB finalized guidance on the way it expects banks to prudently manage and transparently disclose climate and other environmental risks under the current prudential rules.
BCBS published a technical amendment to the capital treatment of securitizations of non-performing loans by banks.
BoE announced that the Data and Statistics Division is planning to move collection of statistical data to the BoE Electronic Data Submission (BEEDS) portal.
APRA published the updated reporting standards and guidance for the collection of Economic and Financial Statistics (EFS), following a consultation process. Also published was a response letter to the feedback received on the proposal for amending the EFS reporting standards and guidance.
EC is consulting on a draft delegated regulation to supplement the Taxonomy Regulation (2020/852) by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as environmentally sustainable.
The IFRS Foundation published material highlighting the ways in which existing requirements in IFRS standards require companies to consider climate-related matters when their effect is material to the financial statements.
FSB published a progress report on the implementation of reforms to major interest rate benchmarks, including the London Inter-bank Offered Rate (LIBOR) benchmark.