EBA releases final draft of ITS for supervisory reporting under Basel III reforms

The European Banking Authority (EBA) has published its final draft implementing technical standards (ITS) on supervisory reporting requirements, amid the latest Basel III reforms in the EU.

The European Banking Authority (EBA) has published its final draft implementing technical standards (ITS) on supervisory reporting requirements, amid the latest Basel III reforms in the EU.

The introduction of these updated standards aims to foster consistent and enhanced supervision by providing supervisors with the necessary tools to monitor compliance with the CRR 3 requirements.

These technical standards are essential because they enable supervisors to ensure that institutions comply with the Capital Requirements Regulation (CRR3) and implement the latest Basel III reforms in the EU, promoting consistent and improved supervision.

The EBA, established to ensure effective and consistent prudential regulation and supervision across the European banking sector, continuously works to improve regulatory frameworks.

By updating the supervisory reporting framework, the EBA ensures it remains relevant and meaningful, aligned with CRR 3 amendments.

The new ITS include changes to the supervisory reporting requirements, covering areas such as the output floor, credit risk, market risk, credit valuation adjustment (CVA) risk, operational risk, leverage ratio, and transitional supervisory reporting on exposures to crypto-assets.

These updates are designed to offer supervisors comprehensive and comparable information to effectively monitor institutions’ compliance with regulatory standards.

A notable aspect of the new ITS is the inclusion of minimum reporting requirements for operational risk, based on consultations held in February 2024.

The EBA plans to finalise more extensive reporting requirements and a new framework for the business indicator for operational risk by the end of the year.

These ITS represent the first deliverable in the EBA’s Roadmap on strengthening the prudential framework, published in December 2023.

The EBA will continue to update the supervisory reporting framework with additional CRR 3 requirements that are not directly linked to Basel III implementation.

To aid institutions in the preparation and use of Pillar 3 data, the EBA is also releasing an updated mapping tool between revised disclosure templates and reporting templates, alongside a summary of all Pillar 3 disclosure requirements and their respective frequencies.

Legal basis and background

Regulation (EU) No 575/2013 (the CRR), as amended by Regulation (EU) 2024/1623 (CRR 3), requires the EBA, under article 430(7), to develop draft implementing technical standards (ITS). These standards are to specify uniform reporting formats and IT solutions, including instructions, for supervisory reporting requirements of institutions.

CRR 3 incorporates the latest Basel 3 reforms, which enhance the EU institutions’ prudential framework. This includes new and revised supervisory reporting requirements for institutions.

In accordance with article 430(7), new draft ITS have been developed to implement the necessary changes to the supervisory reporting framework following CRR 3. These new ITS will replace the Commission Implementing Regulations (EU) 2021/451. The new standards also consider the delay in implementing the FRTB capital framework.

While developing these ITS, the EBA has aimed for alignment and integration between the reporting and disclosure frameworks to help institutions comply with both sets of requirements.

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