EESC Opines on Proposals on CRR and European Single Access Point
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR) with respect to the requirements for credit risk, credit valuation adjustment risk, operational risk, market risk, and output floor. EESC also opined on the proposals for a regulation to establish the European single access point (ESAP), a directive and a regulation to amend certain Directives and Regulations for the establishment and functioning of the ESAP.
Opinion on proposed regulation to amend CRR. EESC welcomes the implementation of the remaining elements of the Basel III standards agreed by the Basel Committee for Banking Supervision. EESC calls on legislators to ensure that the proposals envisage a proper balance between two complementary objectives, namely ensuring that EU banks become more resilient and the need to ensure financial soundness and competitiveness in the sector. EESC calls on EC to perform periodical assessments of the actual impact of the proposals, in order to evaluate whether their implementation contributes to more financial market stability and resilience in the banking sector, while also taking into account the competitiveness of EU banks. The EESC also acknowledges that sound and balanced capital ratios contribute to competitiveness. EESC welcomes the European Commission's (EC) approach of strengthening the focus on environmental, social and governance (ESG) risks in the prudential framework (in-line with Basel III), including by better accounting for financial market risks related to climate changes. EESC also welcomes the ESG disclosure work from the European Banking Authority (EBA) aimed at properly assessing banks’ environmental risks and their finance strategy for the transition to a net-zero carbon economy. EESC also calls on EBA to speed up its scrutinizing work on the pillar one framework to determine whether it sufficiently captures the unique features of climate risks. In addition, EESC calls on EBA to strengthen its endeavors to address the shortcomings in the current ESG disclosures at EU level, including on fossil fuels-related assets and assets subject to chronic and acute climate change events, so as to encourage a substantial increase in the sustainable finance strategies of banks.
Opinion on proposals related to ESAP. EESC supports the ESAP, which is a tool that is contributing to a more sustainable, digital, and inclusive economy, to strengthening digital sovereignty, and to better integrating the capital markets. EESC considers that the ESAP should be more ambitious and that more added value should be created by processing the information instead of being only an information tool for gathering raw information with a single access point. The aggregation and transformation of data and of sectoral and territorial reports and analyses should be delivered through ESAP. EESC suggests that ESAP should be built as a flexible tool and that it should be possible to add new data categories and to communicate with national registers or Eurostat, taking into account different types of technologies. ESAP should provide a clear synergy between the sustainable development goals and the Green Deal indicators. EESC suggests that it is very important for the ESAP to ensure standard procedures, transparency, data integrity, and the credibility of the source of information, user-friendly automatic data validation, and proper control of the collection body for data protection. Proper and adequate supervision of financial and ESG data providers will be important in the near future. EESC considers that a dedicated helpdesk is needed to assist with submitting the information in the correct format and ensuring that it is technically usable, and that training in financial and digital literacy are also required. A minimum set of economic Key Performance Indicators (KPIs), defined at the EU level with common methodology, could be inserted into ESAP to ensure better and broader usage.
Related Links
Keywords: Europe, EU, Banking, CRR, Basel, Climate Change Risk, ESG, Regulatory Capital, Output Floor, Market Risk, Credit Risk, CVA Risk, Operational Risk, ESAP, Regtech, EESC
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.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
ECB Sets Out Multiple Regulatory Updates for BanksRelated Articles
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
