EBA Amends Supervisory Reporting Standards for FINREP
EBA published amendments to the implementing technical standards on supervisory reporting with regard to the reporting of financial information or FINREP. The amendments concern the reporting requirements on nonperforming exposures (NPE) and forbearance to allow monitoring of reporting institutions' NPE strategies, the reporting requirements on profit and loss items, and the implementation of the International Financial Reporting Standard on leases (IFRS 16). The standards will be submitted to EC for adoption, along with the final draft standards on COREP changes, which were published in May 2019. Publication of the corresponding Data Point Model (DPM) and XBRL taxonomy is expected in August 2019. The technical standards will apply from June 01, 2020 and the first reporting reference date will be June 30, 2020.
These final draft implementing technical standards amend the EC's Implementing Regulation (EU) No 680/2014 on supervisory reporting with regard to FINREP. These standards aim to improve the reporting requirements on non-performing exposures and forbearance to strengthen supervisors' ability to assess and monitor these exposures. The amended standards allow more granular information to be collected on these exposures on a recurring basis, thus closing the identified data gaps. To ensure proportionality, only institutions having a nonperforming loan (NPL) ratio equal to or greater than 5% are required to report more granular information.
Other changes concern the reporting requirements on profit or loss items, in particular additional details on operating and administrative expenses to allow supervisors to make an in-depth analysis on reporting institutions‘ cost structure and to monitor the impact of reporting institutions‘ remuneration policies. These changes apply to both IFRS and N-GAAP reporters. Finally, for IFRS reporters, minor changes were brought about by the implementation of IFRS 16, as this new standard has replace the International Accounting Standards (IAS) 17 since January 01, 2019. Under IFRS 16, the main change is to the accounting of leases by the lessee: the differentiation between finance and operating leases has been removed and assets and liabilities are, with limited exceptions, recognized in respect of all leases. Considering the revised accounting rules, some minor changes to FINREP are made to obtain a complete view of the main impacts on lessees’ financial situation and profit or loss.
Related Links
Effective Date: June 01, 2020
Keywords: Europe, EU, Banking, Reporting, FINREP, NPE, NPLs, IFRS 16, Leases Standard, Implementing Technical Standards, Proportionality, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Next Article
EBA Single Rulebook Q&A: First Update for May 2019Related Articles
PRA Finalizes Approach to Supervision of International Banks
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
FCA Issues PS21/9 on Implementation of Investment Firms Regime
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
EBA Proposes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
IOSCO Proposes Recommendations on ESG Ratings and Data Providers
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
EC to Defer Application of SFDR Standards Till July 2022
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
EIOPA Consults on Reporting and Disclosures Under Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) proposed to amend the supervisory statement on supervision of run-off undertakings that are subject to Solvency II regulation.
BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
EBA Seeks Views on Proportionality Assessment Methodology
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
US Agencies Propose Changes to Call Reports and Instructions
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
