EBA欧洲银行-28EBA-2017-D-12932920Letter-to-Mr-Dombrovskis2C20Vice-President-re-Commission27s-proposal-for-the-CRR-CRD-review-signed_4页_534kb

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

Core Content

This letter from the European Banking Authority (EBA), signed by Andrea Enria, addresses the European Commission's proposal for a review of the Capital Requirements Regulation (CRR) and Capital Requirements Directive (CRD). It outlines the EBA's supervisory community views on several key aspects of the proposal, including the Net Stable Funding Ratio (NSFR), the Leverage Ratio (LR), and Remuneration. The letter serves as a complement to previous EBA Opinions and emphasizes the need for clarity, monitoring, and harmonization in these areas.

Main Views and Key Information

1. Net Stable Funding Ratio (NSFR)

• The EBA's 2015 calibration report recommendations are largely reflected in the CRR2 proposals.
• A few deviations exist, particularly in the treatment of derivatives and reverse repos, which are less stringent than global standards.
• These deviations are accompanied by a transitional period and a planned further review by the EBA, followed by a delegated act from the Commission.
• The expanded scope of interdependent assets and liabilities raises concerns about potential arbitrage and misuse, which could affect liquidity.
• The EBA suggests introducing a monitoring mandate to ensure the proper application of the interdependent treatment.

2. Leverage Ratio (LR)

• The EBA's recommendations on the calculation of the numerator (Tier 1 capital) and denominator are generally reflected in the proposals.
• Concerns arise regarding the broad and vague definition of "public development credit institution" and "pass-through promotional loans".
• These definitions may allow for arbitrage and circumvention of the rules.
• The EBA proposes that it be mandated to specify the rules and criteria for these exemptions, ensuring they remain under control and aligned with prudential objectives.

3. Article 429a CRR (Revisions Suggested)

• The EBA supports the derogation allowing institutions to exclude certain exposures from their exposure measure.
• It recommends that the EBA be given the mandate to develop draft regulatory technical standards (RTS) for:
  • The definition of "public development credit institution" and its conditions.
  • The conditions under which exposures may be excluded as per point (e) of paragraph 1.
• These RTS should be submitted to the Commission within a specified timeframe (2 years after entry into force).
• The Commission is granted the power to adopt the final RTS in accordance with Regulation (EU) No 1093/2010.
• The EBA also proposes to monitor the application of Article 429a and report to the Commission on the need for any changes.

4. Remuneration

• The Commission's proposal aligns with the EBA's views on remuneration and proportionality.
• The EBA recommends that it be mandated to develop implementing technical standards (ITS) for reporting on high earners, in line with existing CRR requirements.
• This would ensure harmonized and secure data collection at the EU level for aggregate publication.
• The EBA also suggests that this ITS solution does not preclude the possibility of the Commission adopting a "reporting decision" if needed.

5. Article 75 CRD (Proposal)

• Institutions are required to report information on natural persons earning EUR 1 million or more per year, including job responsibilities, business area, and salary components.
• This information must be forwarded to the EBA, which will publish it on an aggregate basis per Member State.
• The EBA is tasked with developing draft ITS to define the uniform formats, frequencies, and IT solutions for this reporting.

Conclusion

The EBA's letter underscores the importance of clear definitions, consistent application, and ongoing monitoring in the revised CRR/CRD proposals. It highlights the need for a harmonized and secure data collection process for remuneration and emphasizes the role of the EBA in ensuring the stability and integrity of the banking sector in the EU. The letter has been shared with the European Parliament and the EU Council Presidency and will be published on the EBA website.