Implementing Technical Standards (ITS) on additional liquidity monitoring metrics

Status: Adopted and published in the Official Journal

These ITS aim at developing additional metrics other than those used to report liquidity coverage and stable funding requirements with a view to providing supervisors with an adequate toolkit to assess liquidity risk and to facilitate their work in performing reviews of Internal Liquidity Adequacy Assessment Processes (ILAAP).

EBA recommends to the EU Commission retention of maturity ladder in the ITS on additional liquidity monitoring metrics

EBA recommends to the EU Commission retention of maturity ladder in the ITS on additional liquidity monitoring metrics

25 September 2015

The European Banking Authority (EBA) issued an Opinion to the European Commission dissenting to its proposed amendment to remove the maturity ladder from the EBA final draft Implementing Technical Standard (ITS) on additional liquidity monitoring metrics. However, the EBA supports the proposed amendment by the European Commission with regard to the application date of the ITS from 1 July 2015 to 1 January 2016.

The final draft ITS submitted by EBA on 18 December 2013 (a slightly updated submission took place on 24 July 2014) include a set of metrics relating to the additional monitoring tools which are designed to complement the supervision of an institution's liquidity risk beyond the scenario for which the liquidity coverage ratio (LCR) is defined. These final draft ITS were built on the basis of the definition of liquid assets for the purposes of reporting in the CRR.

The Commission considers that the maturity ladder needs to be adapted to the detailed definitions of liquid assets set by Commission Delegated Regulation (EU) 2015/61 (Delegated Act on the LCR), published in the Official Journal on 17 January 2015. For this reason, the Commission suggests removing the maturity ladder from the ITS also because, in its view, it would avoid unnecessary regulatory burden and the duplication of implementation costs for the industry.

As explained in detail in the Opinion, the EBA, while sharing some of the concerns raised by the EU Commission, deems it essential to keep the maturity ladder in the ITS considering the relevance of the metric in the liquidity risk assessment by supervisors and the need to have a harmonised metric for this purpose. On the other hand, the EBA supports the proposed amendment made by the Commission on the date of application of the ITS to be moved from 1 July 2015 to 1 January 2016.

Background and legal basis

The final draft Implementing Technical Standards (ITS) on additional liquidity monitoring metrics have been developed according to Article 415(3)(b) of the Capital Requirements Regulation (CRR) and were submitted to the Commission for endorsement on 18 December 2013.

On 13 August 2015, the Commission informed the EBA that in accordance with the procedure set out in the fifth subparagraphs of Article 15(1) of Regulation (EU) No 1093/2010, it intended to amend the final draft ITS submitted by the EBA.

The EBA's competence to deliver an opinion is based on the fifth subparagraph of Article 15(1) of Regulation (EU) No 1093/2010. In accordance with Article 14(5) of the Rules of Procedure of the Board of Supervisors, the Board of Supervisors adopted this Opinion.

Press contacts:

Franca Rosa Congiu

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772

EBA updates on the status of its final draft technical standards on additional liquidity monitoring metrics

EBA updates on the status of its final draft technical standards on additional liquidity monitoring metrics

17 July 2015

The European Banking Authority (EBA), following requests from stakeholders, published today an update on the application date of its final draft Implementing Technical Standards (ITS) on additional liquidity monitoring metrics.

The EBA had originally submitted its final draft ITS on additional liquidity monitoring metrics to the European Commission in December 2013, with a proposed application date of 1 July 2015. Considering that the European Commission has not yet adopted the final draft ITS, it is highly likely that the application date, which will be specified once the ITS are published in the EU Official Journal, will be postponed by at least three months. The final application date will depend on the timeline of adoption of the ITS by the European Commission.

Background and legal basis

The draft ITS on additional liquidity monitoring metrics specifying supervisory reporting requirements have been developed by the EBA according to Article 415(3)(b) of Regulation (EU) No 575/2013 (CRR).

 

Press contacts:

Franca Rosa Congiu

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772

EBA issues revised version of some of its technical standards

EBA issues revised version of some of its technical standards

25 July 2014

The European Banking Authority (EBA) published today the updated versions of three final drafts Implementing Technical Standards (ITS) on Asset Encumbrance, Non-Performing Exposures and Forbearance, and Additional Monitoring Metrics for Liquidity. The three versions published today substitute those previously issued on the same topics.

The updated versions of the ITS on Asset Encumbrance and Non-performing exposures and Forbearance remove data point definitions and validation rules from the ITS on supervisory reporting of institutions submitted to the European Commission (which is now published in the Official Journal of the EU as Regulation (EU) No 680/2014) by introducing an additional text in those ITS that have not yet been adopted by the Commission.

In addition, the standards on Additional Monitoring Metrics (AMM) have undergone minor formatting changes which were necessary to ensure a correct transposition into the DPM/taxonomy format and to ensure consistency with the main provisions of the ITS on supervisory reporting. Additionally, some incorrect legal references were rectified and some clarifications added. Here is an overview of the main changes:

  • Format changes needed for the development of the DPM/Taxonomy (identification of templates, columns and rows used in the DPM);
  • Deletion of some provisions which were inconsistent with the main instructions of the ITS (precision, treatment of cells without content, use of "Of which");
  • Additional specifications needed for reporting amounts;
  • Inconsistencies between templates and instructions, especially in terms of labels or missing explanations;
  • Correction of legal references and general clarifications.

For the sake of transparency, the EBA also published a track-changes version of the Annexes of the ITS on Additional Monitoring Metrics for Liquidity. The Data Point Model and the set of validation rules applicable to the set of AMM templates will be publicly available on the EBA website shortly.

Legal basis and next steps

The EBA is required, among others, to develop implementing technical standards specifying supervisory reporting in the area of encumbrance of assets for institutions (Articles 99(5) and 100 of Regulation (EU) No 575/2013); additional monitoring metrics (Articles 415(3)(b) of Regulation (EU) No 575/2013) and non – performing exposures (Article 99(5) Regulation (EU) No 575/2013).

Press contacts:

Franca Rosa Congiu

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772

EBA publishes final draft Technical Standards on metrics for monitoring additional liquidity

EBA publishes final draft Technical Standards on metrics for monitoring additional liquidity

18 December 2013

The European Banking Authority (EBA) publishes today its final draft Implementing Technical Standards (ITS) on additional liquidity monitoring metrics. The ITS provide supervisors with an adequate toolkit to assess the liquidity risk profile of institutions. The standards will be part of the Single Rulebook aimed at enhancing regulatory harmonisation in the banking sector in the European Union (EU).

The EBA developed these ITS following the approach of the Basel Committee on Banking Supervision (BCBS). The monitoring tools in these ITS, together with the Liquidity Coverage Ratio (LCR) standard, will support EU supervisors in the assessment of the liquidity risk of an institution. They aim at allowing the identification of potential liquidity difficulties that may emerge from a negative trend or an absolute result in the metrics.

In particular, the ITS issued by the EBA set out five metrics:

  • Contractual maturity ladder;
  • Concentration of counterbalancing capacity by issuer/counterparty;
  • Concentration of funding by counterparty and product type;
  • Prices for various lengths of funding;
  • Roll-over of funding.

The proposed application date is 1 July 2015.

Legal basis and next steps

These final draft ITS have been developed pursuant to Article 415(3)(b) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (colloquially known as Capital Requirements Regulation or CRR).

The final standards have been sent today to the European Commission for their adoption as EU Regulations that will be directly applicable throughout the EU.

Press contacts:

Franca Rosa Congiu

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772