Featured Product

    EBA Updates Guidance on Disclosures for Identification of G-SIIs

    November 04, 2020

    EBA revised the final draft regulatory technical standards on specification of the methodology for identification of global systemically important institutions (G-SIIs). EBA also revised the guidelines on specification and disclosure of systemic importance indicators. These revisions were the result of the revised BCBS framework on identification of global systemically important banks (G-SIBs) as well as the new requirements laid down in the fifth Capital Requirements Directive (CRD5). These revised technical standards will apply from the 2022 G-SII assessment exercise, based on information at the end of 2021. The regulation on the technical standards shall enter into force on the day following that of its publication in the Official Journal of the European Union.

    One of the key changes stemming from the revised approach of BCBS is the introduction of a new trading volume indicator, which adds up to the existing 12 indicators used to measure systemic importance. In addition, the revised standards include insurance activities in the indicators-based measurement approach. At the EU level, CRD5 has mandated EBA to develop an additional methodology for identification of G-SIIs that excludes the cross-border activities of EU banks in member states of the European Banking Union. The rationale behind this request is to recognize the efforts made in recent years to create harmonized European banking regulation and a common approach to resolution. This additional EU methodology shall take into account the Single Resolution Mechanism (SRM), which could lead to the re-allocation of a G-SII from a higher to a lower sub-category, potentially translating into lower capital buffer requirements. The list of EU G‐SIBs identified by BCBS and the G‐SIIs identified by authorities of member states have been identical since 2014 and are expected to remain so in future.

    Data instructions on indicator values and detailed template specifications are included in the EBA guidelines. Annual updates to these instructions and specifications will be published on EBA website. These updates should be taken into account by all groups and institutions with an exposure measure exceeding EUR 200 billion, with insurance subsidiaries’ activities included in the calculation. The EBA guidelines on G-SIIs disclosure requirements have also been updated as a result of the revised Basel framework. These requirements apply not only to institutions that have already been identified as G-SIIs but also to other very large entities in EU that have an overall leverage ratio exposure measure exceeding EUR 200 billion. The EBA guidelines go beyond the requirements laid down in the regulation and enable member state authorities to perform the identification and scoring process and disclosure in a timely manner and, in particular, before the identification of any G-SIIs.

    In addition to setting out the disclosure requirements in the EBA guidelines, EBA will seek to establish, through the implementing technical standards on supervisory reporting, reporting obligations for the same systemic importance indicators, in a proportionate manner and for large institutions only. The availability and accuracy of such data, which is expected to be thoroughly checked by the relevant authorities and the reporting institutions in scope, will be importance for the soundness of the EU framework for identifying and assigning buffer rates to G‐SIIs and, therefore, for its credibility at the global level. The draft technical standards will be submitted to EC for endorsement, following which they will be subject to scrutiny by the European Parliament and the Council before being published in the Official Journal of the European Union, if necessary. The guidelines will be translated into the official EU languages and published on the EBA website. The deadline for competent authorities to report whether they comply with the guidelines will be two months after the publication of the translations.


    Related Links

    Effective Date: OJ+1 Day

    Keywords: Europe, EU, Banking, Basel, CRD5, G-SII, G-SIB, Disclosures, Reporting, Cross-Border Activities, Systemic Risk, BCBS, EBA

    Featured Experts
    Related Articles

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News

    DNB Publishes Multiple Reporting Updates for Banks

    DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.

    February 28, 2023 WebPage Regulatory News

    NBB Sets Out Climate Risk Expectations, Issues Reporting Updates

    The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting

    February 24, 2023 WebPage Regulatory News

    EBA Updates Address Securitization Standards and DGS Guidelines

    The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.

    February 21, 2023 WebPage Regulatory News

    FSB Publishes Letter to G20, Sets Out Work Priorities for 2023

    The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023

    February 20, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8793