The European Banking Authority (EBA) announced today that it will be conducting a transparency exercise in December 2016 on a wide sample of over 100 banks, which will provide actual information on banks' balance sheet based on supervisory reporting data. Transparency exercises are an annual feature of the EBA's work but this year's exercise will be independent from, whilst complementary to, the 2016 EU-wide stress test. This will ensure appropriate coverage of banks across all countries in the EU.
The transparency exercise will include data on capital, risk-weighted assets, profits and losses, market risk, securitisations, credit risk, exposures towards sovereigns, and non-performing exposures and forborne exposures for December 2015 and June 2016.
Running a transparency exercise on an annual basis, including those years in which a stress test exercise is also carried out, will ensure a wide coverage of disclosure in terms of both banks and countries as well as continuity of the time series of semi-annual bank-by-bank financial information, which the EBA started in 2011.
The annual transparency exercise will align, to the extent possible, the sample of banks to the one used in the EBA Risk Assessment Report and will be based exclusively on supervisory reporting data. Therefore, banks will not be required to report any additional data and while this significantly reduces the burden for them, it also implies that in 2016, the information on sovereign exposures will be simplified and the template on leverage ratio dropped until it becomes part of banks' regular supervisory reporting.
The exercise will be launched in September 2016, when the templates will be first populated by the EBA and submitted to banks for the verification of data and resubmission of supervisory reporting in case of errors. The data will be frozen by the end of October 2016 and is expected to be published in early December 2016, together with the EBA 2016 Risk Assessment Report.