Submission #25

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Czech Banking Association

Question 1: Do respondents have any comment to the scope of application of the draft guidelines?

Based on information in Article 13 CRR and Paragraph 7 of GL and its explanatory text it is not clear whether the GL is applied only on EU parent company consolidated level, or on a solo level as well.

Question 2: As currently foreseen, the application date will be in June 2017. Do respondents find the date of application of the guidelines appropriate?

To ensure the data quality meets at least the minimal criterion for public disclosure the deadline for the implementation of such a complex task as a daily LCR calculation is too short. Not only the institutions have to build a technical solution but to ensure the good quality of daily data, they have to revise and rebuild their accounting procedures including consolidated basis. No feasibility study of this task has been done.
The application date may thus be 30. 6. 2017 if average end-of-month LCR will be disclosed instead of average daily LCR.

Question 3: Do respondents consider that the transitional period is sufficiently clear? Yes.

Question 4: Do respondents have any comment relative to the proposed LCR related items prone to rapid change? No comment.

Question 5: Do respondents have any comment relative to the content of the table in Annex I of the draft guidelines and the way to display it?

The scope of the required information is very close to those delivered in ICAAP and ILAAP. Sensitive information (strategies, and liquidity management processes, hedging policy) is contained. Their disclosure may adversely impact financial markets. We believe that the assessment of this kind of information by the regulator is sufficient.

Question 6: Do respondents have any comment on the content of the LCR disclosure template in Annex II?

The institutions shall only be compliant with the LCR as whole and there are no limits for the subcategories as proposed in the Annex II. Such granularity will disclose rather volatile data which might lead to wrong conclusions.

Question 7: Do respondents have any comment relative to the content of the template on qualitative information on LCR?

We did not find any statement how qualitative information should be measured. If it is meant as a verbal description, the institutions will be incomparable. If it develops into a series of numeric indicators, it cannot be assessed now.

Question 8: What information from Annex II, if any, would respondents consider irrelevant for LCR disclosure purposes?

We consider the required detail of information (weighted and unweighted volumes, division to stable and unstable, operational and non-operational) as business sensitive. We believe that the LCR quality should be left upon regulators.

In our point of view, disclosure of LCR, HQLA and inflows and outflows is sufficient.

Question 9: What information would respondents like to see added to the LCR disclosure requirements? We have no information to be added.

Question 10: Do respondents find the general instructions in Annex III sufficiently clear for the development of the disclosure template? No comment.

Question 11: Do respondents consider that the methodology proposed for the LCR disclosure template is, from a practical point of view, operationally feasible meaning that the accuracy of the daily reporting observations for the calculation of the averages can be ensured? Do respondents consider that this operational feasibility could depend on the size of the credit institution or could be different in the case of solo or consolidated data?

Daily LCR calculation is hardly workable in practice. Data from this exercise would be raw data from the source applications, not cleaned. In many cases, the daily data is not available (deposits covered by deposit guarantee scheme, customer segmentation, data on a consolidated level). Some of the data must be prepared manually. Daily LCR calculation would be operational only on using proxies. Daily data as raw data may be skewed with outliers. The question is whether the inaccuracy of proxies and outliers would not excess the one of end-of-month LCR measurement.

Question 12: Do respondents find the specific instructions in Annex III sufficiently clear for the development of the LCR disclosure template and the template on qualitative information on LCR in Annex II? No comment.

Question 13: In the elaboration of this CP, the EBA has considered several policy options under three main areas: a proportionality approach in the scope of application, items for a higher disclosure frequency and methodology for the calculation of the disclosures. Do respondents have any particular view on the assessment conducted on these policy options?

We support:
- Option 1B : a unique template for all the institutions
- Option 2B : not to make any consideration for a special attention
- Option 3B : to disclose indicators based on end-of-month observations

Question 14: Do respondents think that the opportunity of having a simplified disclosure template for smaller credit institutions should be assessed? This simplified LCR disclosure template could comprise for example the ratio itself, the numerator and the denominator as key ratios and figures of the LCR, in the sense of Article 435 (1) (f) CRR. What arguments could respondents provide to justify that the LCR ratio itself, its numerator and its denominator are the only key ratios and figures of the LCR which are required to be disclosed by smaller credit institutions? More generally please provide any argument in favor or against a simplified template, and if you believe a simplified template for LCR disclosures is relevant, please indicate which type of information you would like to have disclosed in that template. What specific criteria would respondents suggest to identify those smaller institutions for which a simplified disclosure template could potentially be disclosed?

We support a more simple version of a unique template for all the institutions. The template in its submitted version discloses sensitive business information.

Upload files EBA_CP_on_LCR_Dislosure_CBA_General_Remarks.pdf

Name of organisation Czech Banking Association