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  • European Banking Authority Launches Consultation on Technical Standards for Public Disclosures under CRR II

    10/16/2019
    The European Banking Authority has launched a consultation on its draft Implementing Technical Standards for public disclosures by financial institutions under the Capital Requirements Regulation. CRR implements the Basel Committee on Banking Supervision’s Pillar 3 disclosure requirements, which require relevant financial institutions to disclose information about their risks and risk management procedures and policies. In 2018, the Basel Committee published updated Pillar 3 requirements. The revised CRR was published in June 2019 and, for the most part, will apply directly across the EU from June 28, 2021.  It incorporates the revised Basel Committee disclosure standards into CRR and mandates the EBA to produce the draft ITS to ensure comparability of the disclosures made with international non-EU active banks. Responses to the consultation should be submitted by January 16, 2020. The EBA expects to submit the revised draft ITS to the European Commission in June 2020.
     
    The draft ITS set out uniform formats for all Pillar 3 disclosures, that financial institutions must make under CRR, creating a  more comprehensive Pillar 3 disclosure framework. The relevant CRR disclosures relate to, amongst other things, institutions’: (i) risk management objectives and policies; (ii) compliance with capital requirements; (iii) exposure to counterparty credit risk; (iv) compliance with capital buffers; (v) credit risk mitigation techniques; and (vi) methods for calculating risk-weighted exposures. It is hoped that the uniformity of such disclosures will facilitate the comparability of the information delivered, as well as promoting market discipline and making it easier for users of information to access key prudential data. The draft ITS are applicable to all institutions subject to the relevant CRR disclosure requirements. The following disclosures are not, however, covered by the draft ITS: (i) own funds and eligible liabilities; (ii) exposures to interest rate risk on non-trading book positions; (iii) indicators of global systemic importance; and (iv) environmental, social and governance risks. ITS for these disclosures will be published separately.
     
    The EBA has simultaneously published a consultation on its draft ITS for supervisory reporting requirements under CRR II. Responses to that consultation should also be submitted by January 16, 2020. There are significant commonalities between the information made available via the public disclosures and that which must be reported in accordance with the draft supervisory reporting ITS. To ensure consistency of the information being disclosed and reported, the EBA has published a mapping of the public disclosures templates and supervisory reporting requirements to demonstrate how the two frameworks have been integrated.
     
    View the EBA's consultation and mapping on draft ITS for public disclosures by financial institutions.
     
    View details of CRR II.
     
    View details of the EBA’s consultation on its draft ITS for supervisory reporting requirements under CRR II.
     
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