31 August 2020
The European Banking Authority (EBA) published today an Opinion in response to the European Commission’s intention to amend the EBAs final draft Regulatory Technical Standard (RTS) on the specification of the nature, severity and duration of an economic downturn. The EBA is of the view that the several changes introduced by the Commission would alter the agreed policy and, therefore, suggests changes with the aim of maintaining the agreed consensus of the originally submitted text.
The EBA’s Opinion identifies three substantive changes introduced by the European Commission. The first one is about the deletion of the requirement, which states that the economic indicators relating to one downturn period should be significantly correlated. The EBA is of the view that such requirement should be re-introduced. The second substantive change relates to the introduction of a proportionality principle for the cost of data (Recital 10 and Article 2), which alters the agreed policy. Here, the EBA suggests some redrafting to clarify the relevant data sources. Finally, for the third substantive change, which is about removing the possibility of considering a shorter time series than 20 years for economic indicators relating to an EU member state that joined the EU less than 20 years ago, the EBA agrees to Commission’s proposal despite the substantive nature of the change.
In addition, the EBA identifies a number of non-substantive and drafting changes, which, in its view, may unintendedly hamper the clarity of the text. The EBA is, therefore, proposing alternative drafting suggestions.
The EBA has delivered this Opinion in accordance with Article 10(1), subparagraph 6, of Regulation (EU) No 1093/2010, which requires the Authority to submit its response in the form of an opinion to amendments proposed by the European Commission.
The EBA had submitted its final draft RTS to the European Commission on 5 November 2018.