EBA欧洲银行-28EBA-2017-D-12912920Letter-to-Mr-Scicluna-Minister-of-Finance-EU-Presidency-re-Commission27s-proposal-for-the-CRR-CRD-review-signed_4页_538kb

EBA Letter on Commission's Proposal for CRR/CRD Review Summary

Core Content

The European Banking Authority (EBA), represented by its Chairperson Edward Scicluna, has issued a letter in response to the European Commission's proposal for the review of the Capital Requirements Regulation (CRR) and the Capital Requirements Directive (CRD). The letter outlines the EBA's views on several key areas of the proposal, emphasizing the importance of consistency with global standards, clarity in definitions, and the need for ongoing monitoring by the EBA to ensure the effective implementation of the regulatory framework.

Main Views and Key Information

1. Net Stable Funding Ratio (NSFR)

• The EBA's calibration report recommendations from December 2015 are largely reflected in the CRR2 proposals.
• Some deviations from the EBA's advice exist, particularly regarding the treatment of derivatives and reverse repos, which have been eased compared to global standards.
• These changes come with a transitional period and a future review by the EBA and a delegated act from the Commission.
• The EBA suggests a monitoring mandate to ensure the scope of interdependent assets and liabilities is not misused, which could affect liquidity.

2. Leverage Ratio

• The EBA's recommendations on the calculation of the numerator (Tier 1 capital) and denominator of the Leverage Ratio are generally reflected in the proposals.
• Concerns remain about the broad and ambiguous definition of "public development credit institution" and "pass-through promotional loans."
• The EBA recommends that the Commission provide clearer rules and criteria for these exemptions, and that the EBA be given a monitoring role to ensure these exemptions are not abused.

3. Article 429a CRR (Revisions Suggested)

• The EBA supports the proposal to allow certain exposures to be excluded from the exposure measure, but emphasizes the need for clarity.
• It recommends that the EBA develop draft regulatory technical standards (RTS) to:
  • Specify the meaning of "public development credit institution" and the conditions for exemption.
  • Define the conditions under which exposures may be excluded under point (e) of Article 429a(1).
• These draft RTS should be submitted to the Commission within two years after the entry into force of the proposals.
• The EBA also suggests monitoring the application of these provisions across the EU to ensure consistent and appropriate implementation.

4. Remuneration

• The Commission's proposal aligns with the EBA's views on remuneration and proportionality.
• The EBA suggests that it should be mandated to develop implementing technical standards (ITS) for the reporting of remuneration data, particularly for high earners.
• This would ensure a harmonized and secure method of collecting and publishing such data at the EU level without imposing additional burdens on institutions.
• The EBA also notes that this ITS solution does not preclude the possibility of a "reporting decision" being implemented.

5. Article 75 CRD (Proposal)

• The EBA supports the proposal that competent authorities collect data on natural persons within an institution earning EUR 1 million or more per year.
• This data should include job responsibilities, business area, and salary components.
• Competent authorities must forward this information to the EBA, which will then publish it on an aggregated basis per Member State.
• The EBA is also tasked with developing draft ITS to define the uniform formats, frequencies, and IT solutions for this reporting.

Conclusion

The EBA's letter underscores the need for a balanced, clear, and consistent prudential framework that aligns with global standards while addressing EU-specific concerns. It highlights the importance of monitoring and clarity in key areas such as NSFR, Leverage Ratio, and Remuneration, and advocates for the EBA to play a central role in this process through the development of technical standards and ongoing oversight.