European Savings and Retail Banking Group

No comments on this point. See the ESBG common response.
No comments on this point. See the ESBG common response.
The assumption on the preferred LCR level, 110%, is also remarkable. The extra ‘buffer’ may affect institutions in a different manner depending on the bank and the business models. For a bank with wholesale flows as issued debt and lending/borrowing to credit institutions the LCR can be rather volatile and a 10% ‘buffer’ is probably too narrow.
First of all, the European Savings and retail Banking Group (ESBG) would like to welcome the opportunity to share its views on this draft regulatory technical standards paper. Please find below some of our main messages and views.
The ESBG would first like to highlight the surprising fact that the EBA only further investigates the Norwegian Krone and Danish Krone, leaving aside the Swedish Krone and the Central Eastern and South Eastern Europe (CESEE) currencies. Other countries may also experience somewhat of a deficit in liquid assets, especially, when taking into account the free-float exchange rate. We believe that a broader analysis should have been made. From our point of view it is important that the EBA makes an additional effort to gather data and perform a thorough assessment for all the European Union currencies.
We are concerned about the possibility of creating different level playing fields. It could happen that banks operating in countries in which a liquid assets shortage has been observed may gain advantage compared to banks operating in other jurisdictions. Moreover, in some of these excluded countries the demand for liquid assets is expected to exceed the supply of liquid assets in the domestic currency.
Therefore, the ESBG calls on the EBA to perform additional surveys to cover all EU currencies in its ITS in order to ensure a ‘level playing field’ to all banks within the EU which have to cope with the problem of a liquid asset shortage. Indeed, ensuring a ‘level playing field’ is one of the key functions and initial mandates of the EBA.
Furthermore, the definitions and data used in the analysis do not seem to be updated, as they have not used the CRR as a reference, but rather the Basel Committee’s definition. This is especially striking due to the fact that it is the CRR text which will be applied. Furthermore, this analysis has been made before finalising the rules on HQLA, which could be problematic as it makes this consultation less relevant. The assumption on the preferred LCR level, 110%, is also remarkable. The extra ‘buffer’ may affect institutions in a different manner depending on the bank and the business models. For a bank with wholesale flows as issued debt and lending/borrowing to credit institutions the LCR can be rather volatile and a 10% ‘buffer’ is probably too narrow.
No comments in this particular point.See the ESBG common response.
César Blanco Martínez
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