Shearman & Sterling LLP | FinReg | European Banking Authority Publishes Final Draft Technical Standards for Public Disclosures and Reporting Requirements Under CRR II
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  • European Banking Authority Publishes Final Draft Technical Standards for Public Disclosures and Reporting Requirements Under CRR II
    The European Banking Authority has published its final reports and draft Implementing Technical Standards for public disclosures and supervisory reporting requirements under CRR II. The EU Capital Requirements Regulation implements the Basel Committee on Banking Supervision's Pillar 3 disclosure requirements, which require banks 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, published in June 2019, incorporates the revised Basel Committee disclosure standards and mandates the EBA to produce the draft ITS to ensure comparability of the disclosures made with international non-EU active banks.
    Between October 2019 – January 2020, the EBA consulted on two sets of draft ITS mandated under CRR II which cover: (i) public disclosure of information relevant to banks' risk profiles and (ii) supervisory reporting requirements. The EBA's final reports set out the final draft ITS, which take into account feedback received during the consultations.
    The public disclosure standards cover areas such as risk management objectives and policies, compliance with capital requirements and exposure to counterparty credit risk. They will replace a series of existing technical standards and guidelines with the aim of ensuring that end-users have comprehensive and comparable information, allowing them properly to assess the risk profiles of the relevant banks.
    The supervisory reporting requirements cover requirements for the format and frequency of supervisory reporting on, for example, own funds, large exposures and leverage ratios and liquidity and stable funding. They also set out templates for the calculation of minimum loss coverage requirements and extend the financial reporting requirements for non-performing exposures, in accordance with the "Backstop Regulation", the EU regulation governing banks' treatment of non-performing exposures.
    The draft ITS have been submitted to the European Commission for adoption following which they will be published in the Official Journal of the European Union. The first disclosure and reporting reference dates will be June 30, 2021.
    View the EBA's final draft technical standards.

    View details of the EBA's consultation on technical standards for public disclosures under CRR II.

    View details of the EBA's consultation on supervisory reporting requirements.

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