EBA updates banking risk dashboard: EBA has published an update to its risk dashboard for the EU banking sector reflecting the development of Key Risk Indicators identified by banks in the first two quarters of 2014. New to the dashboard are:

  • own funds' positions and requirements based on the supervisory reporting standards from the Common Reporting framework (COREP); 
  • an annex on aggregate risk parameters.

The up-to-date risk dashboard also shows: and

  • a positive trend in banks' capital positions;
  • high but stable levels of non-performing loans;
  • volatile profitability levels affected by the clean-up of some major banks' balance sheets, and by litigation costs; and
  • continuing shifts in balance sheets' structure.

(Source: Risk Dashboard Q3 2014)

EBA publishes mortgage intermediary passport paper: EBA has published a discussion paper on draft requirements for passport notifications for mortgage intermediaries under the Mortgage Credit Directive (MCD). It asks for comments by 12 March 2015. (Source: EBA Publishes Mortgage Intermediary Passport Paper)

EBA publishes structured deposit intervention advice: EBA has published its final advice to the Commission on product intervention under the Markets in Financial Instruments Regulation (MiFIR) in relation to structured deposits. EBA based its advice on the factors ESMA outlined in its consultation paper, and amended them to make them suitable for use in relation to structured deposit products. It has now produced a list of criteria and factors that the EBA and national supervisors should take into account when considering whether a product causes significant investor protection concern or a threat to the markets. It says not all factors would need to be present to justify intervention. The advice lists 13 subject areas and, in relation to each, several examples of what might fall under the relevant heading. (Source:EBA Publishes Structured Deposit Intervention Advice)

EBA consults on MCD creditworthiness: EBA has published a consultation paper on draft Guidelines on creditworthiness assessments under the MCD. The paper looks at how lenders should assess and verify consumers' creditworthiness before making a loan covered by the MCD. The paper includes guidelines on how to verify income and information and assess the customer's likely ability to repay. It also gives guidance on how to cater for potential negative scenarios and on identifying high risk loans. The consultation will run until 12 February 2015. (Source: EBA Consults on MCD Creditworthiness)

EBA consults on arrears and foreclosure guidelines: EBA has published a consultation paper on its Draft Guidelines on arrears and foreclosure under the MCD. Specifically, the MCD requires Member States to adopt measures to encourage lenders to show "reasonable forbearance" before initiating foreclosure proceedings. The Draft Guidelines provide greater detail on what lenders should consider and the appropriate policies and procedures. The consultation will end on 12 February 2015. (Source:EBA Consults on Arrears and Foreclosure Guidelines)

EBA adds new single rule book Q&As: EBA has added four new items to its single rule book Q&As. (Source: EBA Single Rule Book Q&As)

EBA consults on LCR and LR reporting: EBA is consulting on two draft Implementing Technical Standards (ITS) amending the Commission's Implementing Regulation on supervisory reporting with regard to the Liquidity Coverage Ratio (LCR) and the Leverage Ratio (LR), and following the Commission's Delegated Acts specifying these ratios: 

  • on LCR reporting, the changes will apply only to credit institutions. The ITS set out a new set of templates and instructions for reporting, and steps for calculating, the LCR. EBA has also published a calculation tool. Investment firms will continue reporting the LCR items as they currently do; 
  • on LR reporting, the amendments are less sweeping and the changes to the LR reporting instructions and templates mainly reflect an alignment with the Basel Committee's standard on LR. 

EBA plans the first reference date to be six months from the adoption of the updated ITS, but says no date would be earlier than December 2015. It asks for comments on the amendments to the LCR reporting by 10 February 2015 and on the amendments to the LR reporting by 27 January 2015. (Source: EBA Consults on LCR and LR Reporting)

EBA publishes O-SII criteria: EBA has publishes its final Guidelines defining the criteria that EU competent authorities will use to identify institutions that are systemically important either at EU or Member State level ("other" systemically important institutions (O-SIIs)). There is a two-step process. First the authorities will look at mandatory quantitative indicators (related to size, interconnectedness, relevance for the economy, complexity), which will give a score. Banks scoring above a certain threshold are O-SIIs, while those scoring below a certain threshold can never be identified as O-SIIs. The authorities then use their judgement, based on a list of indicators, to determine whether to identify banks falling between the two thresholds as O-SIIs. Regulators must fully disclose their reasons for identifying one of these banks as an O-SII and may exclude from the process very small institutions that pose no systemic risk. (Source: EBA Publishes O-SII Criteria) 

EBA publishes updated validation rules: EBA has updated its list of ITS validation rules highlighting those that have caused technical issues or were incorrect. (Source: EBA Publishes Updated Validation Rules)o

EBA repeals capital preservation recommendation: Following a decision by its Board of Supervisors on 15 December 2014 EBA has repealed its recommendation on the preservation of Core Tier 1 capital of EU banks during the transition to the CRD/CRR framework. The decision means that the recommendation is no longer in force. The action was taken as EU banks have strengthened their capital positions over recent years and so many are already in a position to satisfy the minimum CRD/CRR fully loaded capital requirements. (Source: EBA Repeals Capital Preservation Recommendation)

EBA consults on resolution colleges: EBA is consulting on draft Regulatory Technical Standards (RTS) on how resolution colleges of regulators should function. The RTS cover:

  • operational organisation of resolution colleges;
  • resolution planning and joint decisions on the development and maintenance of a group's resolution plan and performance of the resolvability assessment, measures the authorities should discuss to address substantive impediments to resolvability and the minimum requirements for own funds and eligible liabilities. This part also deals with how to handle disagreement between regulators; and
  • cross-border group resolution.

Consultation closes on 18 March 2015. (Source: EBA Consults on Resolution Colleges)

EBA publishes internal models ITS: EBA has published the final ITS on joint decisions related to the approval of internal models under the CRR. The ITS set out the joint decision process to be followed by regulators when deciding on whether to grant permissions to institutions to use the internal ratings-based approach (IRB) for credit risk, the internal model method for counterparty risk (IMM), the advanced measurement approach for operational risk (AMA) and the internal models for market risk. (Source: EBA Publishes Internal Models ITS)