EBF response to EBA consultation on guidelines
on the LCR disclosure (EBA/CP/2016/06)

EBF advisor: Timothy Buenker

Publication date: 25 July 2016

Key points:

• The European Banking Federation supports greater transparency of banks’ liquidity risk management by disclosing useful information rather than over-loading market participants with too much detail.
•  The disclosure of the Liquidity Coverage Ratio (LCR) should be based on good quality data that has been audited. The disclosure of daily LCR calculations would not fulfil this criteria and would be very burdensome and operationally complex with little added value for end users. We suggest the LCR disclosure template to be based on averaged values over monthly observations, already reported to the supervisor.
• The scope of application of these guidelines should be aligned with the way banks manage their liquidity and be consistent with any waivers for liquidity reporting.
• There should be sufficient time for the transition to the new disclosure requirements. The deadline for the application should be at minimum 6 months from the approval and publication of the final text. A start date of January 2018 coinciding with the phasing in of the full LCR would be preferred.
• The EBA should align its Guidelines with the Basel approach and allow respondents to provide their own qualitative inputs which will vary depending on their business model and degree of liquidity and funding risks to which they are exposed.
• The proposed Guidelines should only be addressed to competent authorities.