EBA欧洲银行-EBA-Op-2016-09-EBA-Opinion-on-Commission-amendments-to-ITS-on-benchmarking-of-internal-approaches_4页_230kb

EBA Opinion on Amendments to the Final Draft Implementing Technical Standards on Benchmarking of Internal Approaches

Introduction and Legal Basis

The European Banking Authority (EBA) issued an opinion on the European Commission's intention to amend the Final Draft Implementing Technical Standards (ITS) on benchmarking under Article 78(8) of Directive 2013/36/EU (CRD). These ITS are used by financial institutions to calculate own funds requirements using internal approaches for market and credit risk.

• Article 78(8) of CRD mandates that competent authorities conduct annual assessments of the quality of internal approaches.
• The EBA is required to produce a report to support this assessment.
• The original draft ITS was published by the EBA on 2 March 2015 and submitted to the Commission.
• The Commission intended to amend the ITS in accordance with Article 15(1) of Regulation (EU) No 1093/2010.

EBA's Opinion on the Amendments

The EBA fully supports the Commission's proposed amendments to the ITS. These amendments aim to:

• Incorporate points agreed with EBA staff based on experience from the 2014-2015 benchmarking exercise.
• Correct errors or inconsistencies in the original draft.
• Clarify the instructions in the annexes of the final draft.

The EBA identified some additional minor technical amendments during its review, which are outlined in Annexes 4 and 5 of the amended ITS. These changes are intended to remove inconsistencies and improve the clarity and usability of the ITS.

Annual Updates to the ITS

Under Article 78 of the CRD, the benchmarking exercise is conducted annually. This necessitates regular updates to certain parts of the ITS, particularly:

• Market Risk: The maturities and features of instruments in benchmarking portfolios must be updated as they change over time.
• Credit Risk: The list of counterparties in low default portfolios needs to be maintained due to events such as insolvencies and mergers.

The EBA emphasizes that these updates are essential to ensure the relevance of the benchmarking portfolios for supervisors. For the 2017 benchmarking exercise, the EBA will make necessary changes to the ITS based on the Commission's adopted version and submit them promptly to allow institutions adequate preparation time.

EBA's Considerations on Future Amendments

The EBA highlights that future amendments to the ITS may be more substantial due to ongoing regulatory changes by the Basel Committee on Banking Supervision (BCBS). The current legal framework requires all methodological details to be included in the ITS, which leads to:

• A lengthy process for adoption, translation, and publication.
• Delays in updating benchmarking portfolios and parameters, potentially resulting in outdated data when institutions report.

To address these challenges, the EBA strongly recommends that:

• Benchmarking portfolios, reporting templates, and instructions be adopted by the EBA rather than the Commission.
• This would allow for more timely and flexible updates, ensuring that the data remains relevant and aligned with evolving regulatory requirements.

This recommendation is in line with the EBA's previous opinion on the functioning of the benchmarking process under Article 78 of the CRD. It also aligns with the approach taken in Implementing Regulation (EU) 2015/79, where the EBA is given the authority to update validation rules and data point definitions electronically.

Conclusions

The EBA agrees with the Commission's proposed amendments and acknowledges the need for a more efficient process to handle future updates. A more flexible approach, granting the EBA the power to update benchmarking portfolios and reporting requirements independently, would better support the timely and accurate assessment of internal approaches by competent authorities and improve the overall effectiveness of the benchmarking process.

This opinion was issued on 11 May 2016 in London and will be published on the EBA's website.

[signed]
Andrea Enria
Chairperson
For the Board of Supervisors