The European Banking Authority (EBA) launched today a consultation on its revised Guidelines on the remuneration benchmarking exercise. The updates to these Guidelines, which had originally been published on 27 July 2012, follow on from changes in reporting requirements as laid down in the Capital Requirements Directive and Regulation (CRDIV and CRR). The consultation will run until 07/05/2014.
The major changes in the EBA draft guidelines concern the reporting templates, which have been revised to include more granular data and to ensure even better quality of the data collected. However, the main approach and processes to collect and process the data are maintained in these updated Guidelines. The revised templates should already be used for the collection of data for the financial year 2013.
The updated templates for the remuneration benchmarking exercise introduce a more granular collection of remuneration for different business areas, control and corporate functions. This ensures more meaningful benchmarking practices across different classes of staff.
The proposed changes ensure that the Guidelines comply with the amended requirements of the CRD and the CRR, as well as the quality of the data, hence allowing the EBA to carry out strengthened data analysis.
Comments can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 07/05/2014.
All contributions received will be published following the close of the consultation, unless requested otherwise.
The proposed draft Guidelines have been developed on the basis of Directive 36/2013 of 26 June 2013 (CRD). The EBA is expected to finalise and publish the Guidelines by 30/06/2014.
The European Banking Authority (EBA) launched today a consultation on a revised version of its XBRL Taxonomy for supervisory reporting, which incorporates additional reporting requirements for asset encumbrance, non-performing exposures and forbearance. This consultation aims at ensuring that the data national competent authorities collect from credit institutions and investment firms is transmitted to the EBA in a uniform and consistent manner. The consultation runs until 14 April 2014.
The proposed document, which is based on the EBA’s final draft Implementing Technical Standards (ITS) on asset encumbrance, forbearance and non-performing exposures and their related Data Point Models (DPM), presents the data items, business concepts, relations and validation rules described by the revised EBA Data Point Model(s) (DPM) on supervisory reporting in the technical format of an XBRL taxonomy.
Although primarily intended for use in data transmission between competent authorities and the EBA, authorities may choose to use the proposed XBRL taxonomy or a similar one for collecting data from credit institutions and investment firms in Europe.
Comments can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 14 April 2014.
All contributions received will be published following the close of the consultation, unless requested otherwise.
The EBA has developed this taxonomy in accordance with Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 (Capital Requirements Regulation – CRR), and based on two supplementary ITS to the ITS and DPM on supervisory reporting.
Uniform data formats are necessary to enable the exchange of reported data regarding groups of credit institutions and investment firms, as part of the operation of the Single Rulebook aimed at enhancing regulatory harmonisation in the banking sector in the EU and facilitating a proper functioning of cross-border supervision. In this respect, this taxonomy will lead to greater efficiency in and convergence of supervisory practices across Members States, facilitating the supervisory process and allowing supervisors to identify and assess risks consistently across the EU and to compare EU banks in an effective manner.
The Joint Committee of the three European Supervisory Authorities (ESAs - EBA, ESMA and EIOPA) launched today a public consultation on its draft Guidelines on the convergence of practices aimed at ensuring consistency of supervisory coordination arrangements for financial conglomerates. This public consultation will run until 12 June 2014.
These Guidelines will enhance the level playing field in the financial market and reduce administrative burdens for firms and supervisory authorities. Their objective is to clarify and enhance cooperation between national competent authorities on cross-border groups that have been identified as financial conglomerates.
The document focuses on how authorities should cooperate in order to achieve a supplementary level of supervision of financial conglomerates. This will serve the purpose of addressing loopholes in present legislation, as prescribed by the FICOD (Financial Conglomerates Directive).
These areas include in particular the mapping of the financial conglomerate structure and written agreements; the coordination of information exchange, supervisory planning and coordination of supervisory activities in emergency situations; the supervisory assessment of financial conglomerates; other decision-making processes among the competent authorities.
The Joint Committee of the three European Supervisory Authorities expects to publish the final guidelines in the second half of 2014.
The proposed draft Guidelines have been developed on the basis of Article 11 of the Financial Conglomerates Directive, which mandates the EBA, ESMA and EIOPA to develop, through the Joint Committee, guidelines aimed at the convergence of supervisory practices with regard to the consistency of supervisory coordination arrangements in accordance with Article 131a of Directive 2006/48/EC (currently Article 116 of Directive 2013/36/EU) and Article 248(4) of Directive 2009/138/EC.
Comments to this consultation can be sent clicking on the "send your comments" button. Please note that the deadline for the submission of comments is 12 June 2014.
The European Banking Authority (EBA) launches today a consultation on draft Regulatory Technical Standards (RTS) aimed at specifying the minimum margin periods of risk (MPOR) that institutions acting as clearing members may use for the calculation of their capital requirements for exposures to clients. These RTS will be part of the Single Rulebook aimed at enhancing regulatory harmonisation in the banking sector in the European Union. The consultation runs until 9 May 2014.
In order to incentivise the use of central counterparties (CCPs), and in line with the international standards that amended the Basel II text, the Capital Requirements Regulation (CRR) introduces a special treatment for centrally cleared derivatives. In this respect, these draft RTS deal with the capital requirements that institutions acting as clearing members need in order to calculate their exposures to clients arising from cleared derivatives. These draft RTS do not deal with institutions’ exposures to central counterparties (CCPs).
In particular, these draft RTS specify the level of a particular parameter, the margin period of risk, that clearing members may use when they apply the Internal Model Method (IMM) or other non-internal methods to calculate the regulatory requirements for Counterparty Credit Risk (CCR). The proposed methodology aims at properly capturing the risk arising from derivatives exposures to clients adding very limited operational burden on institutions. This is done by identifying the liquidation periods estimated by CCPs for margin purposes as proxies for the margin periods of risk.
Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 9 May 2014.
All contributions received will be published following the close of the consultation, unless requested otherwise.
A public hearing will take place at the EBA premises on 27 March 2014 from 14:00 to 16:00 hours UK time.
The proposed draft RTS have been developed on the basis of Regulation of Regulation (EU) 575/2013 (Capital Requirements Regulation – CRR). The EBA is expected to submit these draft ITS to the European Commission for endorsement by 30 June 2014.
The Joint Committee of the three European Supervisory Authorities (EBA, ESMA and EIOPA - ESAs) launched today a consultation on draft Implementing Technical Standards (ITS) on the mapping of the credit assessments to risk weights of External Credit Assessment Institution (ECAIs). These ITS will be part of the Single Rulebook in banking aimed at enhancing regulatory harmonisation across the European Union (EU). The consultation deadline has been extended until 20 June 2014.
This ‘mapping’ has to be provided for all ECAIs, as defined by the Capital Requirements Regulation (CRR), including any credit rating agency that is registered or certified in accordance with the Regulation on Credit Rating Agencies (CRA) or a central bank issuing credit ratings that are exempt from the application of the CRA Regulation.
In particular, the following elements have been taken into account in the mapping process:
In addition, a description of the implementation of the qualitative factors has been provided in the explanatory boxes of these draft ITS.
Legal background
The proposed draft ITS have been developed on the basis of Regulation 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms.
The EBA is expected to submit these draft ITS to the European Commission by 1 July 2014.
The European Banking Authority (EBA) launched today a public consultation on the methodology for identifying Global Systemically Important Institutions (G-SIIs). The work aims at ensuring a transparent identification process in line with international regulatory work on global systemically important banks. The public consultation runs until 28 February 2014 and covers the draft RTS on the methodology for identifying G-SIIs, and draft ITS and Guidelines on the disclosure of the value of indicators used in the identification process.
The draft Regulatory Technical Standards (RTS) provide consistent parameters and specify a harmonised methodology for identifying G-SIIs and determining adequate levels of own funds across the European Union. The Capital Requirements Directive (CRD) requires that each year Member States’ authorities calculate an individual score to measure a bank’s systemic significance. Five categories of indicators to be used in this scoring process are defined in the CRD and the EBA draft RTS specify twelve further sub-indicators falling under these categories.
The draft Implementing Technical Standards (ITS) define uniform disclosure requirements to publicise the values used for the identification and scoring process for G-SIIs. These ensure fair competitive conditions between comparable groups of institutions, resulting in greater convergence of supervisory practices and more accurate risk assessments across the EU. Furthermore, uniform disclosure improves data quality and strengthens market discipline.
In order to ensure a transparent identification process and a level playing field, the proposed draft Guidelines foresee that not only G-SIIs, but also other large institutions with an overall exposure of more than EUR 200 billion Euro and which are potentially systemically relevant, will be subject to the same disclosure requirement.
Comments can be sent to the EBA by clicking on the "send your comments" button on the respective consultation pages. Please note that the deadline for the submission of comments is 28 February 2014.
All contributions received will be published following the close of the consultation, unless requested otherwise.
In order to compensate for the higher risk that Global Systemically Important Institutions (G-SIIs) represent for the financial system and the impact that their potential failure may have on sovereign finance and taxpayers, the Capital Requirements Directive (CRD) foresees that higher own funds requirements should be imposed on G-SIIs.
The EBA developed these RTS on the basis of internationally agreed standards, such as the framework established by the Financial Stability Board (FSB), as well as standards for assessing Global Systemically Important Banks and for higher loss absorbency requirements developed by the Basel Committee on Banking Supervision (BCBS). What is more, in order to reduce the administrative burden for institutions, the identification of G-SIIs in the EU is synchronised with the BCBS process. This allows institutions to report the same data to both the BCBS and national authorities at Member States level.
The Joint Committee of the European Supervisory Authorities (EBA, ESMA and EIOPA - ESAs) is launching today a one-month public consultation on the removal of mechanistic references to credit ratings in their guidelines and on the definition of sole and mechanistic reliance on such ratings.
The term “sole and mechanistic reliance on credit ratings” is mentioned in Article 5b(1) of the European Regulation on Credit Rating Agencies (Regulation (EU) No 462/2013). However, neither its formal definition nor explanations of its meaning are included in the document.
In order to have a common approach towards this issue, the ESAs have developed a definition of “sole and mechanistic reliance”, and are consulting with market participants on whether this definition is clear and can be used in practice. The consultation paper contains:
The ESAs intend to refer to this definition in all their future guidelines, recommendations and draft technical standards where relevant.
The current public consultation also contributes to the initiative of the Financial Stability Board to reduce the reliance on ratings.
The consultation paper is available on the websites of the three ESAs: EBA, ESMA and EIOPA.
The consultation will end on 5 December 2013 cob. Please note that comments submitted after the deadline will not be processed.
The European Banking Authority (EBA) launches today a consultation on a Recommendation on the use of the Legal Entity Identifier (LEI). The document will require all entities for which information is required under EU reporting obligations to obtain a pre-Legal Entity Identifier (pre-LEI) code for reporting purposes.
In the course of 2014, the EBA will receive supervisory data for a large sample of banks in the context of the Implementing Technical Standards on Supervisory Reporting (ITS). A single supranational identifier of banks needs to be chosen in order to collect and store the data that will be submitted to the EBA.
There is widespread agreement at global level on the need for a uniform system for legal entities identification. The Financial Stability Board (FSB) coordinates regulatory work at international level to achieve a unique system for identifying parties in financial transactions and is taking forward work to launch the Global LEI System (GLEIS). The GLEIS is not yet fully operational, but an increasing number of entities (pre-Local Operating Units, pre-LOUs) already issue LEI-like identifiers (pre-LEIs) that will be eligible to become true LEIs once the GLEIS is fully operational.
The EBA encourages and supports the establishment of the GLEIS. The use of pre-LEIs by the competent authorities when fulfilling their reporting obligations to the EBA will enhance supervisory convergence and ensure the high quality, reliability and comparability of data.
The European Banking Authority (EBA) launched today a consultation on draft Implementing Technical Standards (ITS) on disclosure for leverage ratio. These standards will be part of the EU Single Rulebook in the banking sector and aim at harmonising disclosure of the leverage ratio across the EU by providing institutions with uniform templates and instructions. The consultation runs until 24 January 2014.
These draft Implementing Technical Standards include all the items that are relevant for disclosure under the provisions set out in the Capital Requirements Regulation (CRR) and are aligned, as much as possible, with the Basel disclosure framework. The disclosure framework set out in the ITS consists of four templates:
Comments can be sent to the EBA by clicking on the "send your comments" button on the respective consultation pages. Please note that the deadline for the submission of comments is 24 January 2014.
All contributions received will be published following the close of the consultation, unless requested otherwise.
A public hearing for the three consultations will take place at the EBA premises on 16 December 2013 from 10:00 to 13:00 UK time.
The proposed draft ITS have been developed on the basis of Regulation 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms.
The EBA is expected to submit these draft ITS to the European Commission by 30 June 2014.
As the European Commission has been empowered to enact a delegated act to change the calculation of the leverage ratio before disclosure begins (i.e. 1 January 2015), the proposed templates and instructions are potentially subject to changes before they are finally adopted and implemented.
The European Banking Authority (EBA) launches today a consultation paper on draft Guidelines setting out the calculation of the discount rate for variable remuneration and clarify how it should be applied. The consultation will run until 18 January 2014.
The variable and fixed component of remuneration for identified staff is capped at 100% or at a maximum of 200%, subject to shareholders’ approval. When calculating the ratio between variable and fixed component, Member States may allow institutions to apply a discount rate of 25% (or less subject to national laws) of the variable remuneration, provided the latter is paid in instruments that are deferred over a period of not less than 5 years.
The discount rate consists of the national annual inflation rate, the average interest rate of EU government bonds, an incentive factor linked to the use of long-deferred instruments and an incentive factor linked to the use of additional retention periods. These last two factors increase with the length of the actual deferral and retention periods.
The discount rate is calculated taking into account the length of the period between the award and the vesting of variable remuneration.
Comments can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 18 January 2014.
All contributions received will be published following the close of the consultation, unless requested otherwise.
A public hearing will take place at the EBA premises on 29 November 2013 from 10:00 to 12:00 UK time. To register for the public hearing, click here.
The proposed draft Guidelines have been developed on the basis of Directive 2013/36/EU of 26 June 2013. The EBA is expected to finalise and publish the Guidelines by 31 March 2014.