August 30, 2018

BCBS released a technical amendment on additional Pillar 3 disclosure requirements for the jurisdictions implementing an expected credit loss (ECL) accounting model as well as for the jurisdictions adopting transitional arrangements for the regulatory treatment of accounting provisions. The application of ECL accounting models and introduction of any transitional arrangements took effect from January 01, 2018. The additional amendments to the Pillar 3 standard will, therefore, come into effect from January 01, 2019 and are applicable for banks using an ECL accounting model after this date as well as for the banks using transitional arrangements for the regulatory treatment of accounting provisions.

The amendment is intended to provide users with disclosures that fully reflect any transitional effects for the impact of ECL accounting on regulatory capital as well as to provide further information on the allocation of accounting provisions in the regulatory categories of general and specific provisions for standardized exposures during the interim period. The following disclosures in the Pillar 3 standard will apply: 

  • Template KM2 (Key metrics—Total Loss-Absorbing Capacity (TLAC) requirements at resolution group level). Additional disclosures require banks to disclose the “fully loaded” impact of ECL transitional arrangements used in TLAC resources and ratios.
  • Template CR1 (Credit quality of assets). Given that the existing regulatory distinction between general provisions and special provisions does not directly correspond to how provisions would be measured under the new ECL accounting standards, additional disclosures are required on the allocation between general and specific provisions for standardized approach exposures.
  • Table CRB (Additional disclosures related to credit quality of assets). This amendment accompanies those related to CR1. Banks are required to disclose the rationale for their categorization of ECL accounting provisions in general and specific categories for standardized approach exposures. The revised templates are in Annex 1.

Annex 1 to the technical amendment contains revised Template KM2, Template CR1, and Table CRB. Technical amendments are defined as changes in standards that are not substantial in nature but that cannot be unambiguously resolved based on the current text.

 

Related Links

Effective Date: January 01, 2019

Keywords: International, Accounting, Banking, Pillar 3, Disclosures, ECL, IFRS 9, Basel III, BCBS

Related Articles
News

FSB to Evaluate Effects of Too-Big-To-Fail Reforms for Systemic Banks

FSB is seeking feedback as part of its evaluation of the effects of the too-big-to-fail reforms for banks.

May 23, 2019 WebPage Regulatory News
News

APRA Releases Minor Changes to Reporting Standards on SA-CCR for Banks

APRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR).

May 22, 2019 WebPage Regulatory News
News

APRA on Industry Self-Assessments into Governance and Accountability

APRA released an information paper analyzing the self-assessments performed by 36 of the country’s largest banks, insurers, and superannuation licensees in response to the final report on the Prudential Inquiry into the Commonwealth Bank of Australia (CBA).

May 22, 2019 WebPage Regulatory News
News

PRA Consults on Maintenance of TMTP Under Solvency II

PRA published a consultation paper (CP11/19) that sets out its approach to update supervisory statement (SS6/16) on maintenance of the transitional measure on technical provisions (TMTP) under Solvency II.

May 22, 2019 WebPage Regulatory News
News

APRA Proposes to Amend Guidance on Residential Mortgage Lending

APRA is consulting on revisions to the prudential practice guide APG 223 on residential mortgage lending in Australia.

May 21, 2019 WebPage Regulatory News
News

IASB Proposes Improvements to IFRS 9 and IFRS 16

IASB published the exposure draft ED 2019/2 that proposes amendments to four IFRS standards, including IFRS 9 on Financial Instruments and IFRS 16 on Leases.

May 21, 2019 WebPage Regulatory News
News

Denis Beau of BDF on Supervisory Priorities for Climate-Change Risks

Denis Beau, the First Deputy Governor of BDF, delivered opening remarks at the BCBS-BSCEE-FSI High-level Meeting for Europe on banking supervision.

May 21, 2019 WebPage Regulatory News
News

ISDA CDM to be Deployed for UK Digital Regulatory Reporting Pilot

ISDA announced deployment of the ISDA Common Domain Model (ISDA CDM 2.0) to support the UK FCA, BoE, and participating financial institutions in testing phase two of the Digital Regulatory Reporting pilot for derivatives.

May 21, 2019 WebPage Regulatory News
News

MAS to Consolidate Regulation of Merchant Banks Under Banking Act

MAS published a consultation paper that proposes to consolidate the regulation of merchant banks under the Banking Act and to move merchant banks to a licensing regime under the MAS Act.

May 21, 2019 WebPage Regulatory News
News

ESAs Amend Technical Standards on Mapping of ECAIs Under CRR

ESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).

May 20, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3118