The FBF does not agree with the requirement to disclose annually quarterly LCR based on an average of daily LCR calculations as these calculations are neither reconciled with accountancy nor audited by competent authorities. The FBF clearly sees no added value for end users to disclose such data.
The scope of application of these guidelines should be aligned with the BCBS Pillar III requirements, which are applied on the consolidated basis only. Indeed it is the most consistent with the way that banks manage their liquidity. Moreover the FBF supports an annual disclosure of quarterly LCR, which are computed on the basis of monthly LCR, in order to be aligned with the current LCR reporting.
The guidelines should clarify that they do not apply to all institutions but only to parent companies.

The implementation date is not appropriate, especially if the undue operational complexity of consolidating daily LCR is maintained in the draft guidelines. The implementation date should be:
- Either sufficiently postponed to give time to institutions to comply with the guidelines;
- Either maintained if the guidelines are amended such that quarterly LCR is a monthly average LCR.

At present, it is not clear whether firms would be expected to disclose information on the LCR from June 2017 or whether this might be the date from which the guidelines apply with disclosure envisaged from a later date. We would note in addition that in June 2017, under the LCR transitional arrangements firms will be required to meet 90% of their LCR requirements and that it might be clearer for users therefore if disclosure was to commence from 2018 when firms will have to meet their LCR requirements in entirety.

In accordance with CRR article 433, institutions shall pay particular attention to the need to disclose more frequently than annually items that can be prone to rapid change. However this provision seems particularly flawed and we do not see the interest to leave this flexibility which could potentially create level playing field issues.
Accordingly we are in favour of option B in the CP “not to make any consideration for a special attention”.

This qualitative disclosure template departs significantly from the BCBS Pillar 3 Disclosure requirements with regards to the type of information required, the level of granularity and, unlike the Basel approach, does not give banks the flexibility to choose the relevant information to disclose. The EBA should align with the Basel approach and allow respondents to provide their own qualitative inputs which will vary depending on their business model and degree of liquidity and funding risks to which they are exposed. Requiring EU banks to provide additional, potentially highly sensitive material could distort the global level playing field and exacerbate any market confidence issues affecting credit institutions.
In addition we note that two of the qualitative requirements are remarkably similar to what is required by the European Central Bank as part of the ICAAP and ILAAP submission process. Such statements contain sensitive information and are duplicative requirements which would not provide any additional insight or value to market participants.

The granularity level of disclosure required in this template is too stringent and could be irrelevant. We believe that it is important to leave banks more flexibility on giving qualitative information. The most relevant issues on the LCR could not be the same for different banks and categorising the information in so detailed items could lead to misunderstanding. We propose to remove this template from the disclosure requirements.

We believe the requirement to publicly disclose all components of the ratio, including unweighted and weighted ones, additionally to the split between operational and non-operational deposits, stable and less stable deposits is over-prescriptive as we think it is the role of competent authorities to judge whether the LCR is properly computed, and not the role of market participants.
Information required in Annex II implies that users of financial statements are very familiar with the detailed LCR rules and definitions and could lead to misunderstanding. We strongly believe that providing the LCR in percentage, or at most the data on inflows, outflows and total HQLA on a gross basis would be largely sufficient.

The FBF does not agree with the suggested approach which is based on averaged values over daily observations based on the reporting templates. The EBA rightly points out the problem of operational feasibility which is a high concern for our members. In order to have the best data quality as possible, a significant part of the data for the LCR is extracted from accounting systems and is produced only monthly. The calculation of a daily LCR will then necessary be based on proxies. Moreover these daily calculations are neither reconciled with accountancy nor audited by competent authorities. We strongly believe the disclosure requirement should be based on the best data quality possible and not on proxies.
If the average daily calculation aims at demonstrating that banks comply with LCR at any time instead of window dressing at end of month, banks can use additional monitoring tools (roll of the funding, funding gaps) to attest that their LCR is managed on a way that is fully compliant each day. Moreover we believe that daily calculation has no added value for end users.
All prudential ratios (capital, liquidity, leverage) should be met at any time by institutions. This does not mean that, for public disclosure purposes, they should be requested to be calculated on a daily basis.
The FBF supports the policy option 3B, and a disclosure of the average of the monthly LCR, which is already reported to the supervisor.

As already said before, the FBF supports policy options:
- Option 1B: a single disclosure template for all institutions, provided that it applies only to consolidating entities ;
- Option 2B: see our response to Q4 ;
- Option 3B: to rely upon metrics based on monthly reporting observations, which are reconciled with accountancy and audited by the supervisor.
In addition the FBF does not share the view of the EBA that additional costs incurred in producing the disclosed data is expected to be limited as the disclosure data can be directly extracted from the ITS on liquidity supervisory reporting. This statement can only be accurate if LCR disclosure will rely on monthly averages, which are already reported to supervisors.

As already said above, the FBF does not agree to apply disclosure requirement at solo level. LCR disclosure requirement should be aligned with BCBS general Pillar III disclosure requirement that apply at the consolidated level only.