Featured Product

    EC Adopts Draft Regulation on Supervisory Reporting Under CRR

    December 17, 2020

    EC published a draft regulation that sets out the implementing technical standards for application of the Capital Requirements Regulation (CRR) with regard to supervisory reporting of institutions and; it is also repealing the Implementing Regulation 680/2014 on supervisory reporting. The draft regulation lays down uniform reporting formats and templates, instructions on and a methodology for how to use those templates, the frequency and dates of reporting, and the definitions and the information technology solutions for reporting to the competent authorities, in accordance with CRR. The Annexes to the draft regulation contain reporting templates and instructions. The final regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union. It shall apply from June 28, 2021, with certain exceptions.

    Taking into account the international standards of BCBS, CRR2 (2019/876) amended CRR on a number of aspects. The changes being made via this draft regulation affect different areas of reporting, including own funds, credit risk, counterparty credit risk, market risk, large exposures, leverage ratio, net stable funding ratio, FINREP, and G-SII indicators. The reporting framework laid down in Regulation 680/2014 is, therefore, being revised and the set of templates for the collection of information for supervisory reporting purposes are being updated. The introductory text in the draft regulation highlights the following key points: 

    • CRR2 introduced a Tier 1 capital leverage ratio requirement calibrated at 3%, a range of adjustments to the calculation of leverage ratio exposure, and a leverage ratio buffer requirement for institutions identified as global systemically important institutions (G-SIIs) in accordance with Capital Requirements Directive IV (2013/36/EU). The leverage ratio reporting should be updated accordingly.
    • CRR2 introduced NSFR reporting requirements, including simplified requirements. It is, therefore, necessary to lay down a new set of reporting templates and instructions. 
    • CRR2 introduced a new supporting factor to be applied to infrastructure projects’ exposures and updated approaches to calculating risk-weighted exposure amounts for collective investment undertakings. It is, therefore, necessary to lay down new templates and instructions for reporting on credit risk and update the current instructions.
    • CRR2 replaced the standardized approach with a more risk-sensitive standardized approach for counterparty credit risk (SA-CCR) and a simplified version (the simplified SA-CCR) for institutions that meet predefined eligibility criteria. It is, therefore, necessary to add new templates and instructions for reporting on counterparty credit risk and update the current instructions.
    • CRR2 replaced the references to "eligible capital" in the calculation of large exposures with references to "Tier 1 capital" and introduced another threshold for reporting of large exposures on a consolidated basis. The large exposures reporting should, therefore, be updated. 
    • Regulation 2019/630 introduced in CRR a prudential backstop for non-performing exposures (NPEs), thus imposing a deduction from institutions’ own funds where NPEs are not sufficiently covered by provisions or other adjustments, following a predefined calendar to build up a full coverage over time. It is, therefore, necessary to amend templates and instructions to ensure that there is a single definition of NPE and "forbearance measures" for both reporting and prudential backstop purposes. New templates are also necessary for the collection of information for the backstop calculation.
    • Regulation 2020/873 is part of a series of measures to mitigate the impact of the COVID-19 pandemic on institutions across EU. Regulation 2020/873 introduced certain amendments to CRR and CRR2 that have an impact on supervisory reporting. These amendments should, therefore be reflected, in the reporting framework.

    In view of the scope of the amendments, and for the sake of clarity, it is appropriate to repeal Regulation 680/2014 and replace it with this draft regulation. Using the updated standards, institutions should start supervisory reporting for the end of second quarter of 2021. However, reporting for the leverage ratio buffer should start from January 2023, as the application of the leverage buffer requirement for G-SII institutions (template 47 of Annex X) was postponed to January 2023 via Regulation 2020/873. Additionally, Articles 9 and 10 shall cease to apply on June 26, 2026:

    • Article 9 covers reporting on own funds and own funds requirements for investment firms subject to Articles 95 and 96 of Regulation 575/2013 on an individual basis.
    • Article 10 covers reporting on own funds and own funds requirements for groups that consist only of investment firms subject to Articles 95 and 96 of Regulation 575/2013 on a
      consolidated basis.

     

    Related Links

    Effective Date: OJ+1 Day

    Keywords: Europe, EU, Banking, CRR, Basel, Reporting, COVID-19, Leverage Ratio, NSFR, Implementing Technical Standards, Credit Risk, Reporting Framework 3.0, EBA

    Featured Experts
    Related Articles
    News

    ECB Amends Guideline on Temporary Collateral Easing Measures

    ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.

    June 17, 2021 WebPage Regulatory News
    News

    EIOPA Releases Report on Artificial Intelligence Governance Principles

    EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.

    June 17, 2021 WebPage Regulatory News
    News

    HKMA to Increase Focus on Suptech and Regtech Cloud Adoption

    HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.

    June 17, 2021 WebPage Regulatory News
    News

    EC Consults on Improving Transparency in Secondary Markets for NPLs

    EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).

    June 16, 2021 WebPage Regulatory News
    News

    BIS and Nordic Central Banks Launch Innovation Hub in Stockholm

    BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Tech Sprint Aims to Explore Technologies to Reach Unbanked

    FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.

    June 16, 2021 WebPage Regulatory News
    News

    EC Releases Sustainable Finance Taxonomy Compass

    EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Proposes Amendments to Real Estate Lending Standards

    FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.

    June 15, 2021 WebPage Regulatory News
    News

    EIOPA to Consider Liquidity Risk in Stress Test for 2021

    EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.

    June 15, 2021 WebPage Regulatory News
    News

    ESRB Paper Discusses Measurement of Impact of Bank Failure via Lending

    The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.

    June 15, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7116