EBA欧洲银行-Final-Report-on-EBA-GL-on-High-Risk_MT_12页_328kb

Summary of EBA/GL/2019/01 Guidelines

Core Content

The EBA/GL/2019/01 guidelines aim to clarify the definition of exposures associated with high risk within the European banking sector, specifically in the context of the Capital Requirements Regulation (CRR) and the European Banking Authority's (EBA) supervisory framework. These guidelines are designed to harmonize the identification of such exposures across the EU, ensuring consistent application of the regulatory requirements.

Main Points and Key Information

1. Compliance and Reporting Obligations

• Mandatory Compliance: Supervisory authorities and financial institutions must comply with these guidelines.
• Reporting Deadline: Institutions must notify the EBA by 15 May 2019 if they conform or do not conform to the guidelines, or if they have exposures not covered by the guidelines.
• Reporting Process: Notifications must be sent to compliance@eba.europa.eu with a reference to "EBA/GL/2019/01". The EBA will publish these notifications on its website.
• Change in Compliance Status: Any change in the compliance status of exposures must be reported to the EBA.

2. Scope and Definitions

• Subject: The guidelines define exposures associated with high risk, excluding those specified in Article 128(2)(a) and (c) of the CRR.
• Application Scope: They apply to exposures not covered by the CRR and are aligned with the mandate of Article 128(3) of the CRR.
• Definitions: Terms used in the CRR, such as "risk capital" and "private equity," are retained with the same meaning in these guidelines.

3. Implementation

• Effective Date: The guidelines apply from 1 July 2019.
• Exposure Classification: The guidelines classify certain exposures as high-risk, including:
  • Investments in debt: Where the risk of loss is significant due to insufficient financial resources of the debtor or market liquidity issues.
  • Investments in equity: Where the risk of loss is high due to the lack of a clear capital structure or insufficient collateral.

4. Specific Types of Exposures

• Exposures to Central Governments and Central Banks: Excluded from the scope due to their low risk.
• Exposures to Regional Governments and Local Authorities: Excluded for similar reasons.
• Exposures to Public Sector Entities: Excluded unless they meet specific criteria.
• Exposures to SMEs: Excluded from the scope, as they are not considered high-risk under Basel III.

5. Governance Aspects

• The guidelines include considerations on internal risk policies, such as risk appetite frameworks and risk management practices.
• They emphasize the need for financial institutions to align their policies with the Basel III framework, particularly in relation to risk-weighted assets (RWAs).

6. Criteria for High-Risk Exposures

• Key Criteria:
  • Significant shortfalls in debtor's financial resources.
  • High exposure levels and lack of collateral.
  • Credit quality and classification.
• These criteria are intended to help institutions identify exposures that pose a high risk of loss.

7. Public Consultation and BSG Feedback

• The EBA conducted a public consultation on the draft guidelines, receiving over 13 responses, 11 of which were published.
• The Bankers' Group (BSG) provided feedback, emphasizing the need for clarity on definitions and the importance of aligning with Basel III.
• The EBA incorporated feedback into the final guidelines, particularly regarding the definition of private equity and risk capital.

Conclusion

The EBA/GL/2019/01 guidelines provide a detailed framework for identifying exposures associated with high risk, ensuring consistent application across the EU. They align with Basel III and emphasize the need for harmonization in risk management practices. The guidelines also include a reporting mechanism for supervisory authorities and financial institutions to communicate their compliance status with the EBA.