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    EBA Updates Documents Post EC Adoption of Pillar3 Disclosure Standards

    March 19, 2021

    EBA acknowledged that EC has adopted the draft regulation that lays down implementing technical standards on public disclosures of institutions and that EBA has updated all the related documents to reflect the adoption of this Implementing Act. The draft regulation is based on the final draft technical standards on Pillar 3 disclosures submitted by EBA in June 2020 and was adopted by EC on March 15, 2021; however, its publication in the Official Journal of the European Union is still pending. The adopted implementing standards provide a comprehensive Pillar 3 disclosure framework, implement regulatory changes introduced by the revised Capital Requirements Regulation (CRR2), and align the disclosure framework with international standards from BCBS. The Annexes to the draft regulation contain disclosure templates and instructions. The final regulation shall enter into force on the twentieth day following that of its publication in the Official Journal and shall apply from June 30, 2021.

    Introduction of a single set of implementing technical standards on disclosures is necessary to provide institutions with a comprehensive integrated set of uniform disclosure formats, templates, and tables and to ensure high-quality disclosures. Thus, the draft regulation of EC will repeal Regulations 1423/2013, 2015/1555, 2016/200, and 2017/2295 that lay down uniform formats, templates, and tables for own funds, the countercyclical capital buffers, the leverage ratio, and asset encumbrance, respectively. The introductory text in the draft regulation highlighted the following points to indicate the key changes being incorporated into the disclosure requirements:

    • CRR2 introduced a new calibrated leverage ratio and the leverage ratio buffer for global systemically important institutions. To implement that amendment and the necessary adjustments in the exposure calculation, it was necessary to lay down the related templates and tables.
    • CRR2 introduced the new disclosure requirements for net stable funding ratio. To implement that amendment, it was necessary to lay down a template for those new disclosure requirements.
    • CRR2 replaced in CRR the standardized approaches for counterparty credit risk with a Standardized Approach for Counterparty Credit Risk (SA-CCR), which is more risk-sensitive, and with a Simplified SA-CCR for institutions that meet the predefined eligibility criteria. CRR2 also revised the Original Exposure Method. To implement those amendments, it was necessary to introduce a comprehensive set of disclosure tables and templates.
    • CRR2 introduced a new disclosure requirement for performing, non-performing and forborne exposures, including the disclosure of information on collaterals and financial guarantees received. To implement that amendment and those new disclosure requirements, it was necessary to introduce a comprehensive set of templates and tables. For reasons of simplicity and consistency, those templates and tables should be based on the disclosure templates and tables that have already been developed by EBA in its guidelines on the disclosure of non-performing and forborne exposures.
    • Regulation 2017/2401 amended CRR to reflect, into the capital requirements laid down in Regulation 2017/2401, the specific features of simple, transparent, and standardized (STS) securitizations as laid down in Securitization Regulation (2017/2402). It was necessary to introduce new disclosure templates and tables with quantitative and qualitative information on securitization to reflect that amendment.
    • CRR2 amended certain remuneration-related disclosure requirements that were laid down in CRR, to ensure that remuneration policies and practices for categories of material risk-takers are consistent with effective risk management. A set of disclosure templates and tables implementing those disclosure requirements needed to be laid down.

     

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    Keywords: Europe, EU, Banking, Pillar 3, Disclosures, Reporting, Basel, Implementing Technical Standards, Regulatory Capital, CRR2, EBA, EC

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