EBA欧洲银行-Opinion-on-improving-decision-making-for-supervisory-reporting-28EBA-Op-2017-0329_21页_458kb

Summary of EBA Opinion on Improving the Decision-Making Framework for Supervisory Reporting under Regulation (EU) No 575/2013

Core Content

The European Banking Authority (EBA) published an opinion on 7 March 2017, proposing improvements to the decision-making framework for supervisory reporting requirements under Regulation (EU) No 575/2013 (CRR). The opinion highlights the inefficiencies and delays in the current process, which involve the EBA drafting and the European Commission endorsing implementing technical standards (ITS). These delays create uncertainty, mismatches between reporting obligations and regulatory requirements, and increased costs and burdens for financial institutions.

The EBA suggests that the process should be streamlined by allowing it to adopt supervisory reporting requirements directly through its own implementing technical decisions, rather than relying on the Commission for endorsement. This would enhance the speed, predictability, and legal certainty of the reporting framework, which is essential for the harmonisation of data across the EU banking sector.

Main Issues with the Current Framework

• Delays in Adoption: The endorsement process by the Commission often takes 10–23 months, leading to inconsistencies and uncertainty in the implementation timeline for financial institutions.
• Mismatches Between Regulatory Requirements and Reporting Obligations: Financial institutions are required to report under outdated ITS until the new requirements are officially published, causing unnecessary duplication and increased compliance costs.
• Inconsistent and Unpredictable Technical Updates: The need for frequent updates and clarifications to reporting templates and technical solutions (e.g., DPM, XBRL taxonomies, VRs) is not adequately addressed by the current process, resulting in non-harmonised solutions and data quality issues.
• Uncertainty and Burden on Institutions: The lack of clarity about the final content and timing of reporting requirements forces institutions to manage two regimes in parallel, increasing administrative and financial burdens.

EBA's Proposals

The EBA proposes a more direct and efficient approach to decision-making, allowing it to adopt supervisory reporting requirements independently. Key elements of the proposal include:

• Direct Adoption of Reporting Requirements: The EBA should be empowered to issue implementing technical decisions directly, avoiding the current reliance on Commission endorsement.
• Legal Feasibility: The EBA references existing precedents where it has been granted direct decision-making powers, such as in the Mortgage Credit Directive and Article 138 of the CRR, and suggests that this approach is legally viable.
• Improved Predictability and Timeliness: A direct decision-making process would allow for shorter and more predictable timelines, ensuring that institutions have clear guidance on when and how to implement new reporting requirements.
• Enhanced Accountability Framework: The EBA recommends several measures to strengthen accountability, including:
  • Reiteration of public consultation and cost-benefit analysis
  • Clarification of the obligation to translate decisions into all official EU languages
  • A short ex post objection period for the Commission to raise concerns
  • Periodic reporting on the compliance burden
  • Use of qualified majority voting for EBA decisions on supervisory reporting
  • Expansion of the Board of Appeal's scope to cover EBA decisions of general application

Key Recommendations

• The EBA should be granted the authority to issue implementing technical decisions directly, reducing the need for Commission endorsement.
• A transition mechanism should be introduced to ensure that existing ITS are not repealed until fully replaced by EBA decisions, with the use of correlation tables to maintain clarity during the transition.
• The proposed framework should apply to all supervisory reporting requirements currently covered by the ITS, including those related to:
  • Liquidity coverage ratio (LCR)
  • Leverage ratio (LR)
  • Net stable funding ratio (NSFR)
  • Benchmarking portfolios
  • Disclosure requirements
  • Remuneration data
  • Reporting under Directive 2014/59/EU (BRRD)

Conclusion

The EBA emphasizes that the current decision-making process for supervisory reporting is inefficient, creates uncertainty, and imposes unnecessary burdens on financial institutions. By allowing the EBA to adopt these requirements directly, the process can become more proportionate, efficient, and aligned with the objectives of harmonised supervision and data quality. This approach is consistent with the EBA's role as a Union agency with technical expertise and aligns with the trend of delegating technical responsibilities to the EBA in sectoral legislation.