EBA published the guidelines and templates for reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis. EBA is introducing, on a temporary basis, additional reporting for the payment moratoria applied to ease COVID impact, forbearance measures applied in response to COVID-19 to the existing loans, and public guarantees to new lending in response to the COVID-19 pandemic. The first reporting reference date and the disclosure reference date will be June 30, 2020. The reporting guidelines will be part of the version 2.10 reporting framework release that will be published in June 2020.
The guidelines have been developed to address data gaps associated with the relief measures to ensure an appropriate understanding of institutions’ risk profile and the asset quality on their balance sheets both for supervisors and the wider public. The guidelines cover information that is crucial for understanding the prudential soundness of individual institutions, without impacting their treatment of creditors under moratoria or public guarantees. The information requested here reflects the type of information that senior management in institutions is asking for, and is key to understanding the overall financial stability in EU. The guidelines are built on the existing definitions of the Commission Implementing Regulation No 680/2014 (FINREP). The guidelines cover the following:
- Reporting requirements to monitor the use of payment moratoria and the evolution of the credit quality of the exposures subject to such moratoria in accordance with the guidelines on moratoria
- Disclosure requirements for the exposures subject to the payment moratoria in accordance with the guidelines on moratoria
- Reporting requirements for the new loans subject to specific public guarantees set up to mitigate the effects of the COVID-19 crisis
- Disclosure requirements for the new loans subject to the specific public guarantees set up to mitigate the effects of COVID-19 crisis
- Reporting requirements on other forbearance measures applied in response to the COVID-19 crisis
To facilitate reporting on the basis of these guidelines, EBA will provide technical package, covering validation rules, the data point model (DPM), and the XBRL taxonomy and will fully integrate the new reporting into the EBA reporting framework. Similar to the implementing technical standards on reporting, the XBRL taxonomy will not be mandatory for reporting institutions and will not be part of the guidelines. To facilitate that additional reporting, and reduce the costs for institutions and competent authorities, EBA will also link the technical release of the new reporting requirements with the existing planned release (as a separate module in 2.10 phase 2). EBA will publish the version 2.10 Phase 2 release in June 2020. The additional reporting and disclosure requirements are expected to be time-limited as they are introduced strictly in the context of the COVID-19 pandemic. These reporting and disclosure templates from EBA consider the need for proportionality in terms of the size and complexity of the institutions, the specificities of the measures introduced in member states, and operational efficiency of institutions in current circumstances. Reporting should be performed on a quarterly basis, with the first reference date of June 30, 2020 and for an expected period of 18 months. Disclosure should be performed semi-annually on June 30 and December 31.
Keywords: Europe, EU, Banking, Basel, Reporting, Disclosures, COVID-19, FINREP, Reporting Framework 2.10, Credit Risk, Loan Moratorium, Guarantee Scheme, EBA
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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