BCBS Consults on Amendment to Pillar 3 Disclosures for ECL Provisions
BCBS proposed a technical amendment on Pillar 3 disclosure requirements for regulatory treatment of accounting provisions. The amendment to the rules text is related to additional Pillar 3 disclosure requirements for the jurisdictions implementing an expected credit loss (ECL) accounting model and for jurisdictions adopting transitional arrangements for the regulatory treatment of accounting provisions. Comments are invited on the proposed amendment by May 04, 2018.
BCBS proposed the following technical amendment to the Pillar 3 standard and the revised templates have been included in Annex 1:
- Template KM2 (Key metrics: Total Loss-Absorbing Capacity requirements at resolution group level). Additional disclosure requirements are proposed to 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 correspond to how provisions would be measured under the new ECL accounting standards, additional disclosure requirements are proposed 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 accounting provisions in general and specific categories for standardized approach exposures.
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. As the application of ECL accounting models and introduction of any transitional arrangements take effect from January 01, 2018, BCBS proposes that the additional amendments to the Pillar 3 standard will come into effect from January 01, 2019.
Related Links
Comment Due Date: May 04, 2018
Effective Date: January 01, 2019 (Proposed)
Keywords: International, Banking, Accounting, Basel III, Disclosures, ECL, IFRS 9, Pillar 3, BCBS
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Dieter Van der Stock
IFRS subject matter expert; LDTI subject matter expert; accounting authority; risk management specialist
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.