The EBA consults on draft technical standards on off-balance sheet items under the standardised approach of credit risk

• The EBA plays an important role in the implementation of the Basel III framework through the Banking Package in the EU. 
• These draft technical standards are part of the first phase of the EBA roadmap on the implementation of the EU Banking Package.
• These draft technical standards will contribute to a more a robust regulatory framework, efficient supervision, and enhanced risk control by credit institutions. 

The European Banking Authority (EBA) today launched a public consultation on its draft Regulatory Technical Standards (RTS) under the Capital Requirements Regulation (CRR3) regarding off-balance sheet items under the standardised approach of credit risk.  These RTS provide the criteria that institutions shall use to classify off-balance sheet items, unless explicitly specified in Annex 1 of the CRR. Further, they specify the factors that may constrain the institutions’ ability to cancel the unconditionally cancellable commitments. These RTS are part phase 1 of the EBA roadmap on the implementation of the EU banking package. The consultation runs until 4 June 2024.

 Under the standardised approach of credit risk, the exposure values of off-balance exposure depend on the application of certain percentages, which in turn depend on a bucket classification. The CRR3 is set to introduce amendments to update the calibration of applicable percentages, which results in the introduction of an adjusted weighting scheme and an additional bucket, increasing the number of risk buckets from 4 to 5, and the conversion factor possibilities to 10%, 20%, 40%, 50% or 100%2. These RTS specifies the criteria that institutions shall use to classify off-balance sheet items, unless explicitly specified in the Level 1 text. Further, they specify factors that may constrain the institutions’ ability to cancel the unconditionally cancellable commitments.

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 4 June 2024.

The public hearing on these draft RTS will take place via conference call on Monday 22 April 2024 from 14.00 to 16.00 CEST. The EBA invites interested stakeholders to register using this link by 18 April 2024 at 16:00 CEST.

Legal basis and background

The draft RTS  have been developed according to Article 111(8) of Regulation (EU) No 575/2013 (CRR), as amended by the CRR3.