In our view, the disclosure requirements for small and medium-sized, non-publicly traded banks are already too detailed and too complex. Even the German supervisor has already indicated that it considers the requirements towards small institutions as clearly excessive.
Basically, disclosure requirements are meant to provide current and potential investors with information about the economic situation of the institution. This goal is actually not required for the primary banks. The investors are in fact the customers or members of the cooperative banks. We cannot detect any added value in this case and therefore we see no need for further disclosure requirements.
We demand that the principle of proportionality is also respected in the context of asset encumbrance and that the requirements for small and medium-sized institutions are therefore kept as low as possible. This means that any additional disclosure requirements, that go beyond the existing duties, should not be implemented.
All the data that have to be reported by the banks are referring to end of period values. This allows for a better comparability of the data (especially on the balance sheet) and should therefore be maintained. If in the context of the disclosure of encumbered and unencumbered assets, it should be median values to be reported, they would have to be determined separately for this purpose. This would be accompanied by further increases in costs (especially for IT) and additional time and effort for the institutions. With the end of period values, however, the actual market value of the securities can be determined much easier in terms of sale etc.
As we already mentioned above, as part of our answer to question Q2, we reject the determination of median values. Instead, we advocate, for practical reasons, for end of period values.
The integration of EHQLA and HQLA information would, in our view, represent a high cost factor, which is, especially for small banks, completely out of any relation compared to the benefits. Our banks would initially have to set a definition of EHQLA papers because these are not relevant for them to date. We therefore advocate that, at least for small and medium-sized banks, the requirements are to be kept to a minimum in a way that a reference to the central bank eligibility or to existing data concerning the asset quality that are already available, such as external ratings, are deemed sufficient.
We do not see any additional benefits for the members of the Bavarian cooperative banks by providing the detailed qualitative information in Template D, and consequently we see no need for the detailed disclosure. The principle of proportionality must be respected in this case, too. We therefore reject these disclosure requirements.
We are considering the annual cycle to providing the clients of the Bavarian cooperative banks with the relevant information as absolutely sufficient. Moreover, the Bavarian cooperative banks do not publish quarterly reports. The yearly rotation must therefore absolutely be maintained, in our view.