The European Banking Authority (EBA) launched a survey seeking inputs, until April 07, 2023, from credit institutions on their green loans and mortgages as well as the related existing market practices. The institutions that would like to take part in the survey, must contact the respective national competent authority to receive the survey templates as well as the information on the related process. EBA is also seeking comments, until March 09, 2023, on amendments to the draft implementing technical standards on supervisory disclosures and has published the final guidelines, for the resolution authorities, for publishing their approach to the bail-in tool implementation.
Survey on Green Loans and Mortgages
EBA launched this survey following the November 2022 Call for Advice from the European Commission (EC) on green loans and mortgages. The purpose of this survey is to collect both quantitative and qualitative information that EBA can use to advise EC on the definition and possible supporting tools for green loans and mortgages to retail and small and medium enterprise (SME) borrowers. The Call for Advice was built around four key areas:
- Overview of the green loans market and existing market practices
- Green loan definitions based on the EU Taxonomy
- Green loan origination process
- Measures to encourage and facilitate the uptake of green loans while ensuring the protection of retail borrowers
The EBA advice, which is requested to be delivered by December 29, 2023, should cover the most relevant types of green loans originated by credit institutions in the European Union, including loans with environmental sustainability features, green mortgages and, where applicable, loans based on the Taxonomy and its six environmental objectives. The advice should also cover other non-regulatory measures such as those improving the provision of information, training tools, access to data, or technical guidance. This should be supported by an assessment of the related administrative burdens and benefits of the measures for borrowers and lenders. The advice should assess the merits of further specifying loan origination process requirements for credit institutions with the aim to facilitate the development of the green loans market and their origination and to safeguard credibility and consumer protection in the green retail loan market, while ensuring usability and proportionality. While emphasis should be placed on loan origination requirements for all types of green loans, it should be considered whether the loan origination requirements should be specified with certain aspects related to the origination of green loans based on the Taxonomy. Going forward, EBA plans to organize an industry workshop with institutions participating in this survey. This work is part of the EC Strategy for financing transition to a sustainable economy.
Consultation on Amendments to Supervisory Disclosures
The amendments to the draft implementing technical standards aim at specifying the format, structure, contents list, and annual publication date of the supervisory information to be disclosed by competent authorities. The amendments are intended to enhance the quality and comparability of the reported data by supervisors and enhance transparency by providing the market with more information. The draft standards further amend the Commission Implementing Regulation 650/2014 to consider changes to the EU legal framework, in particular the changes related to supervisory reporting and investment firms. The amendments reflect changes resulting from the legislation adopting the banking package under Directive 2019/878 amending the Capital Requirements Directive (CRD V) and Regulation 2019/876 amending the Capital Requirements Regulation (CRR2).
Guidelines on bail-in tool implementation
The guidelines provide a clear framework for resolution authorities to publish their approach to using the bail-in tool. The guidelines are intended to ensure that a minimum level of harmonized information is made public on how authorities would effectively execute the write down and conversion of capital instruments and the use of the bail-in tool (“exchange mechanic”). The authorities are expected to publish a document defining roles of key stakeholders, describe their approach to write down and conversion, whether they intend to use interim instruments or not, and how the share delivery will take place and further details on the timeline of the process. The resolution authorities are expected to start publishing a high-level document from January 2024 setting out the key aspects of their favored approach—in particular if they intend to make use of interim instruments and to set out a timeline of the bail-in process. The authorities that have already published information are expected to check if that publication complies with these guidelines. The guidelines complement the already published Guidelines for institutions and resolution authorities on improving banks’ resolvability and the draft guidelines on transferability.
- Press Release on Survey on Green Loans and Mortgages
- EC Call for Advice (PDF)
- Press Release on Amendments to Supervisory Disclosures
- Consultation on Amendments to Supervisory Disclosures (PDF)
- Press Release on Guidelines for Bail-in Tool Implementation
- Guidelines on Bail-in Tool Implementation (PDF)
Keywords: Europe, EU, Banking, Lending, Green Loans, Sustainable Finance, ESG, Implementing Technical Standards, Reporting, Basel, Regulatory Capital, Call For Advice, Resolution Framework, Bail-in Tool, EC, EBA
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