EBA Drafts Standards on Pillar3 Disclosure and Reporting Framework 3.0
EBA published the implementing technical standards on Pillar 3 disclosures, in addition to the implementing technical standards on supervisory reporting as part of the reporting framework 3.0. The implementing standards on public disclosures implement regulatory changes introduced by the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876) and aligns the disclosure framework in EU with Basel Pillar 3 standards. The draft implementing technical standards on supervisory reporting reflect the changes brought in by CRR2 and the Prudential Backstop Regulation. Both technical standards have been released in the context of EBA Roadmap on the Risk Reduction Package on disclosures and on supervisory reporting. The first disclosure and reporting reference dates under these standards will be June 30, 2021.
Draft Implementing Technical Standards on Public Disclosures
The Capital Requirements Regulation (CRR) mandates EBA to develop draft implementing technical standards specifying uniform disclosure formats and the associated instructions, in accordance with which the disclosures required under Titles II and III of Part Eight of the CRR shall be made. Following this mandate, EBA has updated its strategy regarding the policy on institutions’ Pillar 3 disclosures. The key goals of the strategy and the new technical standards are to:
- Optimize the Pillar 3 policy framework to provide a single comprehensive package that brings together all previous pieces of regulation and incorporates all prudential disclosures, thus facilitating implementation by institutions
- Promote market discipline by increasing the consistency and comparability of the information disclosed by institutions
- Facilitate access to users of information to institutions’ key prudential data by introducing the new key metrics templates
- Foster ease of implementation for institutions by facilitating their access to, and understanding of, all the disclosure templates and tables
- Increase the efficiency of disclosures by institutions and reduce costs via technology, through the integration of quantitative disclosure data and supervisory reporting
Draft Implementing Technical Standards on Supervisory Reporting
The standards on supervisory reporting cover new reporting requirements on counterparty credit risk and net stable funding ratio, non-performing exposures' minimum coverage, and changes to different areas of reporting, including own funds, credit risk, large exposures, leverage ratio, FINREP, and global systemically important institution (G-SII) indicators. The technical standards also include several proportionality measures, including simplified NSFR reporting for small and non-complex institutions. The standards are a part of the EBA reporting framework 3.0. The draft technical standards will be submitted to EC for endorsement before being published in the Official Journal of the European Union. EBA will also develop data point model (DPM), XBRL taxonomy, and validation rules based on the final draft technical standards. The first reference date for the application of these technical standards is expected to be June 30, 2021. The expected implementation period for the proposed changes is one year.
In 2019, two amendments to the Capital Requirements Regulation (CRR) affected supervisory reporting. One was the finalization of CRR2 (amending Regulation 2019/876), which implements a number key measures such as liquidity, leverage, and large exposures, and the other was the final Backstop Regulation (amending Regulation 2019/630), which sets minimum loss coverage for future non-performing exposures. A number of reporting modules had to be revised as a result of these amendments. The technical standards on supervisory reporting are designed to replace the Implementing Regulation No 680/2014 and have been used as an opportunity to improve consistency between reporting and disclosure requirements.
Related Links
- Press Release
- Standards on Disclosures (PDF)
- Standards on Supervisory Reporting (PDF)
- EBA Roadmap on Risk Reduction Package (PDF)
Keywords: Europe, EU, Banking, Pillar 3, Disclosures, Reporting, CRR2, Basel, Own Funds, Credit Risk, NSFR, Proportionality, FINREP, Framework 3.0, Large Exposures, Implementing Technical Standards, EBA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
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 Examines Use of Big Data and Machine Learning at Central Banks
BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.
APRA Finalizes Reporting Standard for Operational Risk Requirements
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB Publishes Guide for Determining Penalties for Regulatory Breaches
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS Sets Out Good Practices to Manage Operational Risks Amid COVID
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR Announces New Data Collection Application for Banks and Insurers
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.
EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models
EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.
SRB Publishes Overview of Resolution Tools Available in Banking Union
SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.
EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR
EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting
