EBF comments on the EBA’s draft RTS on disclosure of encumbered and unencumbered assets
Publication date: 25 July 2016
We note that the disclosures which are being proposed are intended only within the framework of the disclosure requirements in Part Eight of the CRR and that, as a consequence, they are not meant to be used as the basis for compliance with IFRS Disclosure requirements (see pages 13 and 14 of the CP).
We conclude from this that banks are only required to disclose information on asset encumbrance in their Pillar 3 report and not in their financial statement. It would be useful for the Explanatory Memorandum which will accompany the forthcoming RTS to confirm this.
Although the EBA consultation paper is based on the templates A,B, C, and D of the Guidelines already issued in June 2014, EBA requires the disclosure of some further information, both qualitative and quantitative (e.g. in relation to assets and collaterals in EHQLA and HQLA), which would entail organizational and operational implementation issues to upgrade current IT systems.
We note that the consultation paper does not provide any guidance to competent authorities about the timeframe which they are expected to impose on institutions for the revised templates to be implemented.We believe that it would be appropriate for the final version of the Guidelines to include a recommendation specifying that competent authorities are expected to provide institutions with sufficient time to implement them. Should the EBA decide to retain the EHQLA and HQLA metric as the asset quality indicator, we envisage a minimum period of 2 years due to the reasons given in our answer to Question 4, which also takes into consideration the numerous regulatory and IFRS projects that banks are currently implementing.
The EBF is the voice of the European banking sector, bringing together national banking associations from 45 countries. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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