The disclosure requirements under the CRR/CRD IV are generally too detailed and complex for small, non-publicly traded institutions. The necessity to provide a disclosure report in addition to the financial statements leads to a significant administrative overhead for those small banks. This is even exacerbated by the fact that the disclosure report must be prepared partially in parallel to the financial statements and by the same staff of the banks.
The aim of the disclosure requirements is basically to provide information to potential investors about the financial situation of an institution. With regard to the Bavarian cooperative banks these specifications, however, are overshooting, not only with a view to probably having to publish the LCR. The reason is that their investors" are not institutional investors or rating agencies, but their members and customers. The target group of the cooperative banks’ business information therefore often consists of individuals, to whom any information such as the detailed calculation of the LCR does not offer any benefit.
In addition, the information to be disclosed consists in most cases of requirements towards publicly traded companies. Therefore also the European legislator should proceed prudently and not extend the disclosure requirements of the LCR one-on-one to all European banks. The administrative burden, which is in particular resulting from a possible daily determination of the LCR, would be disproportionate for the cooperative banks compared to the benefit for the supervisory authorities. In particular, the implementation of the technical requirements for the determination of the LCR is extremely complicated and complex. With a view to the complex and inappropriate requirements of disclosing the LCR, the cooperative banks have to be exempted from those disclosure requirements."
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In order to comply with the principle of proportionality, small and medium-sized banks, like cooperative banks, have to be exempted from disclosing the LCR due to their low-risk business model and their less complex structure. For further information thereto, we refer to our answer on question 1 concerning the scope of the proposed regulations.
In order to comply with the principle of proportionality, small and medium-sized banks, like cooperative banks, have to be exempted from disclosing the LCR due to their low-risk business model and their less complex structure. For further information thereto, we refer to our answer on question 1 concerning the scope of the proposed regulations.
