EBA欧洲银行-EBA-BS-2018-336-28EBA-Letter-to-Trilogue-re-RRM29_5页_220kb

EBA Stance on the Risk Reduction Measures Package

Core Content

The European Banking Authority (EBA) has provided its stance on the Risk Reduction Measures Package, which includes the revised Capital Requirement Regulation (CRR2), the Capital Requirement Directive (CRD5), and the Bank Recovery and Resolution Directive (BRRD2). The EBA emphasizes the importance of aligning with the Basel Committee's agreed framework while carefully assessing the impact on the European banking sector, particularly on non-internationally active banks.

Main Views

1. Implementation of FRTB

• The EBA supports the swift and full implementation of the Fundamental Review of the Trading Book (FRTB) as it improves the existing framework.
• They argue that implementing FRTB through a reporting framework alone would lead to dual monitoring of two market risk frameworks, which is inefficient.
• The EBA suggests moving forward with the Level 1 text as originally proposed by the Commission to avoid fragmentation and ensure a consistent application of the framework.
• They recommend that the EBA be entrusted with ensuring proportionate and technically sound solutions in line with the Basel Committee's final texts.

2. Harmonisation and Single Rulebook

• The EBA highlights the importance of deepening the Single Market and avoiding fragmentation.
• They caution against increased national flexibility in the definition part of CRR2, especially for small and non-complex banks, which could lead to regulatory competition and less conservative approaches.
• The EBA advocates for coherent and comprehensive implementation of new rules to maintain the integrity of the single rulebook.

3. Prudential Reporting Framework

• The EBA has shown sensitivity to the burden on banks and supervisors and is concerned about reintroducing national flexibility.
• They support the common reporting framework (COREP) and stress the need to monitor flexibility to ensure that identical data collected nationally does not justify the disapplication of the single reporting framework.
• The EBA welcomes the EP's amendment (Article 101a CRR2), which proposes an integrated, standardised reporting system with central coordination to avoid duplication and enhance information exchange.

4. Own Funds and CET1 Instruments

• The EBA supports maintaining the current regulatory framework for Own Funds and avoiding fundamental changes.
• They endorse clarifications on CET1 instruments (Article 26 CRR2) and the anticircumvention principle to reinforce the framework.
• The EBA advises against changing eligibility criteria for CET1 instruments or deductions from CET1 items, as these are critical to the definition and convergence of capital in the EU.

5. Liquidity Requirements (NSFR)

• The EBA supports the novelty of the liquidity framework introduced post-financial crisis.
• They warn against expanding the list of interdependent assets and liabilities in the NSFR (Article 428f CRR2), as this could undermine the level playing field and system soundness.
• The EBA recommends consultation and monitoring mandates to ensure a robust and consistent application of the framework.

6. TLAC and MREL

• The EBA stresses the need for clarity and predictability in the treatment of TLAC and MREL.
• They call for clearer deadlines, amounts, and subordination requirements to ensure robust application and address level playing field issues.
• The EBA proposes alignment of reporting and disclosure standards between BRRD2 and CRR2 to reduce compliance costs and enhance transparency.

Key Information

• The EBA is actively involved in the implementation of FRTB and is working closely with the Basel Committee.
• They advocate for EBA mandates to monitor and ensure proportionality and technical soundness in the implementation of new rules.
• The EBA cautions against national flexibility in CRR2 that could lead to fragmentation and regulatory competition.
• The EBA supports harmonised reporting and coordinated data collection to avoid duplication and enhance transparency.
• They recommend a minimum of 12 months for completing EBA mandates to ensure high-quality work and stakeholder consultation.

Annex

• The annex contains drafting suggestions for EBA mandates, including:
  • A standardised reporting system (Article 101a CRR2)
  • Clarifications on CET1 instruments (Article 26 CRR2)
  • Mandates for MREL and TLAC to ensure clarity and consistency
  • ESG factors to be evaluated in the SREP and linked to Article 88(1) CRD5 for conflicts of interest.

Conclusion

The EBA's stance underscores the importance of harmonisation, clarity, and proportionality in the implementation of the Risk Reduction Measures Package. They aim to ensure that the single rulebook remains intact and that the European banking sector benefits from a coherent and resilient framework.