The European Banking Authority (EBA) launched today a consultation on Draft Implementing Technical Standards (ITS) on disclosure for own funds. These draft ITS complement the first set of standards on own funds published last April and focus on the disclosure requirements to be met by institutions. Establishing appropriate disclosure requirements increases the transparency on regulatory capital held by European institutions and ultimately contributes to strengthening its quality and quantity. The consultation runs until 31 July 2012.
These technical standards aim at ensuring a uniform approach to disclosure for own funds by institutions and across jurisdictions in order to allow detailed assessments of banks’ capital positions and to make cross-jurisdictional comparisons.
Main features of the ITS
To facilitate international comparisons and to avoid the development of two different disclosure frameworks, the draft ITS follow very closely the approach adopted by the Basel Committee on Banking Supervision (BCBS), while making appropriate reference to the EU regulatory framework (Capital Requirements Regulation - CRR). The EBA also ensured that these ITS are consistent with the COREP framework.
The requirements contained in the draft ITS are directed at institutions which are requested to complete three sets of templates:
a general own funds disclosure template reflecting the capital position of institutions;
a transitional disclosure template covering the phasing in (from 1 January 2013 to 31 December 2017) of the regulatory adjustments – namely with reference to deductions and filters - and reflecting the transitional provisions implemented by the institutions;
a template describing the main features of an institution’s capital instruments.
In addition to the three templates, institutions are required to provide a balance sheet reconciliation between their financial statements and their regulatory own funds to address the disparities between these two sets of data.
The present draft ITS are produced in accordance with Article 15 of the EBA Regulation and will be finalised according to the final version of the CRR/CRDIV proposals before submitting them to the European Commission.
In finalising these ITS, the EBA will also to take into account, as far as necessary, the international developments in the field of disclosure on own funds and in particular the final guidance to be published by the BCBS.
Further consultation papers on the remaining RTS on own funds in the CRR are expected to be published later in 2012.