EBA Updates Lists of Entities for Use in Capital Calculations under SA
EBA updated the list of regional governments and local authorities (RGLAs) that may be treated as central governments for the calculation of capital requirements. Also updated was the list of public-sector entities (PSEs) that may be treated as central government, regional government, or local authorities. These lists are intended to supplement the requirements set out in Articles 115 and 116(4) of the Capital Requirements Regulation or CRR, which specifies the treatment of exposures to central government, regional governments, or local authorities across EU as part of the standardized approach—also known as SA—for credit risk.
The list of RGLAs includes the regional governments and local authorities that are treated as central governments under the standardized approach due to their reduced risk level. As a result of this treatment, exposures to the regional governments and local authorities included in the list will qualify for the same risk-weight as their respective central government. Compared to the previous version, the updated list includes amendments to the regional governments and local authorities in Austria, Finland, the Netherlands, and Sweden. Additionally, the list of PSEs includes the PSEs that are treated as regional governments, local authorities, or central governments under the standardized approach due to their reduced risk level. As a result of this treatment, exposures to the PSEs included in the list will qualify for the same risk-weight as their respective regional government, local authority, or central government. Compared to the previous version, the updated list includes amendments to the PSEs in Greece, Germany, Luxembourg, Malta, Portugal, Slovenia, and Slovakia and updates to the names of PSEs in Denmark and Spain. Both the lists are compiled using information provided by the competent authorities and are based on the classification used in each country. The approaches and eligibility criteria for PSEs and regional governments and local authorities, therefore, differ from country to country in many cases.
Related Links
- Press Release
- List of Regional Governments and Local Authorities (XLSX)
- List of Public Sector Entities (XLSX)
- Updated Lists for SA on Credit Risk
Keywords: Europe, EU, Banking, CRR, Basel, Credit Risk, Regulatory Capital, Standardized Approach, Public Sector Entities, 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.
Nick Jessop
Scenario modeling expert; risk management specialist; quantitative financial modeler
Previous Article
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0Related Articles
ISSB Sustainability Standards Expected to Become Global Baseline
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
BCBS Assesses NSFR and Large Exposures Rules in US
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.
Global Agencies Focus on ESG Data, Climate Litigation and Nature Risks
At the global level, supervisory efforts are increasingly focused on addressing climate risks via better quality data and innovative use of technologies such as generative artificial intelligence (AI) and blockchain.
ISSB Standards Shine Spotlight on Comparability of ESG Disclosures
The finalization of the IFRS sustainability disclosure standards in late June 2023 has brought to the forefront the themes of the harmonization of sustainability disclosures
EBA Issues Several Regulatory and Reporting Updates for Banks
The European Banking Authority (EBA) recently issued several regulatory publications impacting the banking sector.
BCBS Proposes to Revise Core Principles for Banking Supervision
The Basel Committee on Banking Supervision (BCBS) launched a consultation on revisions to the core principles for effective banking supervision, with the comment period ending on October 06, 2023.
US Proposes Final Basel Rules, Transition Period to Start in July 2025
The U.S. banking agencies (FDIC, FED, and OCC) recently proposed rules implementing the final Basel III reforms, also known as the Basel III Endgame.
FSB Report Outlines Next Steps for Climate Risk Roadmap
The Financial Stability Board (FSB) recently published the second annual progress report on the July 2021 roadmap to address climate-related financial risks.
EBA Plans on Ad-hoc ESG Data Collection and Climate Scenario Exercise
The recognition of climate change as a systemic risk to the global economy has further intensified regulatory and supervisory focus on monitoring of the environmental, social, and governance (ESG) risks.
