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    NBB Issues Updates on CCyB, Leverage Ratio Relief, and FINREP Rules

    June 29, 2021

    The National Bank of Belgium (NBB) decided to extend the temporary exclusion of certain central bank exposures from leverage ratio until March 31, 2022 and to maintain the countercyclical buffer (CCyB) rate for credit risk exposures to the Belgian private non-financial sector at 0% for the third quarter of 2021. NBB reviews CCyB quarterly, though it is expecting the CCyB requirement to be nil at least until the first quarter of 2022. NBB also published the Circular NBB_2021_10 that specifies the Belgian rules for implementation of the ECB Regulation on reporting of supervisory financial information (ECB/2021/24). To implement FINREP on an individual basis, a mapping has been established between the Belgian banking accounting law applicable at individual level (BGAAPs) and the European framework for reporting supervisory financial information (FINREP). Circular NBB_2021_10 replaces the former Circular NBB_2020_16 for reporting, with June 30, 2021 as the first reference date.

    Under the Capital Requirements Regulation (CRR) and the EU Regulation 2021/451, Belgian credit institutions are subject to (IFRS) FINREP on a consolidated basis. EU Regulation 2021/451 lays down the implementing technical standards for application of CRR with regard to supervisory reporting of institutions. In Belgium, the impact of the new ECB Regulation is essentially that FINREP reporting is now also imposed on a solo basis for credit institutions. The new ECB Regulation does not repeal national reporting on a solo basis (Schema A), which continues to apply in addition to the FINREP reporting on an individual basis, as required by ECB. The ECB Regulation does not allow entities to choose between IFRS and national accounting standards (NGAAP). For instance, for FINREP reporting on an individual basis, Articles 6, 7, 13, and 14 of ECB Regulation provide different rules according to whether the institution is subject to IFRS or to national accounting standards. As institutions under the Belgian law are subject to BGAAP for preparing their solo annual accounts, such institutions must report FINREP information on an individual basis according to BGAAP.

    To facilitate and standardize FINREP on an individual basis in BGAAP, a mapping has been established to make the link between BGAAP data from Schema A and FINREP tables on an individual basis, as imposed by the ECB Regulation. The mapping is presented in an Excel document (Annex) accompanying the Circular 2021_10, with the mapping showing the FINREP items and the corresponding accounting data under BGAAP as well as a summary justification of the link between the two. Data shall be reported through OneGate application in EUR units, in accordance with the frequencies and formats prescribed by the ECB Regulation. The reporting remittance dates are as provided for in Article 3 of the EU Regulation 2021/451. To facilitate reporting, only the tables and cells to be reported will be available in the OneGate application.

    With respect to the update on leverage ratio relief, via Communication NBB_2021_14, NBB has announced the extension of temporary exclusion of certain central bank exposures from leverage ratio until March 31, 2022. As per the communication, NBB-supervised smaller credit institutions can exclude exposures from the measurement of total exposure under Article 429a (5) of CRR. This follows a statement, dated June 18, 2021, in which ECB confirmed that continued “exceptional circumstances” allow for the extension of the temporary exclusion of certain central bank exposures from the leverage ratio calculation; these exposures include EUR-denominated coins and banknotes as well certain deposits held at the central bank in minimum reserve accounts.

     

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    Keywords: Europe, Belgium, Banking, CCyB, COVID-19, Reporting, IFRS, FINREP, BGAAP, CRR, Basel, OneGate, Leverage Ratio, Regulatory Capital, NBB

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