Update on supervisory reporting requirements for liquidity and leverage ratio

The EBA publishes today feedback documents and amended templates following the consultations on Draft Implementing Technical Standards (ITS) on supervisory requirements for (i) liquidity coverage and stable funding and (ii) leverage ratio. These documents provide the current position of the Authority regarding the supervisory requirements for liquidity and leverage ratio reporting.

In the absence of a final text of the Capital Requirements Regulation (CRR), the EBA cannot publish, at this juncture, a final proposal for these draft ITS. However, in order to provide transparency as to the comments received during the public consultations and to facilitate the institutions' timely preparation towards a harmonised liquidity and leverage ratio reporting, the EBA decided to publish today:

• A draft feedback statement on the Consultation paper on Draft Implementing Technical Standards on supervisory reporting requirements for liquidity coverage and stable funding (EBA-CP-2012-05);

• Draft proposals for templates and related instructions regarding supervisory reporting requirements for liquidity coverage and stable funding;

• A draft feedback statement on the Consultation paper on Draft Implementing Technical Standards on supervisory reporting requirements for leverage ratio (EBA-CP-2012-06);

• Draft proposals for templates and related instructions regarding supervisory reporting requirements for leverage ratio.

These templates and instructions are still preliminary and informal in nature given the pending and still forthcoming adoption of the CRR text.

The two consultations on Draft Implementing Technical Standards (ITS) on supervisory requirements for (i) liquidity coverage and stable funding and (ii) leverage ratio were launched by the EBA in June 2012. These draft ITS, which will be part of the EU single rulebook, intend to specify the main features (formats, frequencies, IT solutions) of prudential reporting to be applied by credit institutions and investment firms in Europe as regards liquidity and leverage ratio reporting.

Voluntary monitoring exercise for Liquidity Coverage Ratio, Net Stable Funding and Leverage Ratio

In order to gather sufficient data and observation points for its economic impact assessment, the EBA has been collecting and analysing information on the liquidity coverage ratio since the beginning of this year. Institutions are participating on a voluntary basis. The EBA intends to continue this exercise on a quarterly basis, to extend the number of institutions and the scope and to include reporting on the net stable funding and leverage ratio. The expansion in scope is designed to ensure that the data set is representative of the European banking sector, and to ensure that it fully reflects the diversity of the sector in each Member State. The data collection under this voluntary exercise is based on the templates used by the Basel Committee on Banking Supervision (BCBS) for its monitoring exercise, which have been adapted to accommodate European specificities.

According to the draft text of the CRR, the EBA needs to report to the European Commission on the possible impact of the liquidity coverage requirement for the first time by 30 September 2013 and subsequently annually.

Next steps

In addition to the present package, the EBA will be launching a consultation on the data point model for leverage and liquidity reporting in the first quarter of 2013.

As soon as  the CRR text is finalised, the EBA will publish a final draft ITS (comprising the legal text of the draft ITS, as well as templates and instructions updated on the basis of the final CRR text). It is currently expected that limited changes will be introduced to these templates and instructions, primarily to reflect the final wording and definitions in the CRR.

As already communicated by the EBA in July 2012 for the standards on supervisory reporting, the EBA acknowledges that a longer time period may be needed, after the entry into force of the CRR, to prepare some of the reporting systems. Nevertheless, given the material which the EBA is publishing today, it is expected that not more than one year will be needed to implement the new reporting provisions. In order to provide certainty to institutions, the EBA envisages that the first remittance dates will fall in the first quarter of 2014 for the full ITS requirements on liquidity and leverage.

Note to the editors

The legal basis for the development by the EBA of these two draft ITS can be found in the draft CRR. This forms part of a package of legislative proposals adopted by the European Commission (EC) in July 2011 and which is currently being negotiated among the EU institutions in the context of the so-called ‘Trilogue' discussions, as part of the process for its final adoption by the EU legislators, the European Parliament and the Council of the EU.