EBA consults on Guidelines on the appropriate subsets of exposures in the application of the systemic risk buffer

The European Banking Authority (EBA) launched today a consultation on draft Guidelines on the appropriate subsets of sectoral exposures to which competent or designated authorities may apply a systemic risk buffer (SyRB) in accordance with the Capital Requirements Directive (CRD). These Guidelines aim at setting a common framework to harmonise the design of the appropriate subsets of sectoral exposures to which a systemic risk buffer may be applied, thus facilitating a common approach throughout the EU. The consultation runs until 13 July 2020.

This consultation paper is setting pre-determined dimensions or components of exposures, which competent or designated authorities should use when defining a subset of sectoral exposures in the application of a systemic risk buffer. A pre-condition when defining a subset of sectoral exposures is its systemic relevance according to a qualitative and quantitative assessment conducted by the relevant authority. The consultation paper recommends three criteria to be used in such assessments: size, riskiness and interconnection.

This consultation paper sets out general principles to ensure the right balance between addressing the systemic risk stemming from the identified subset of sectoral exposures and the unintended consequences when applying a sectoral SyRB to this subset. In particular, relevant authorities should avoid unwarranted interactions with other macroprudential measures and consider reciprocity challenges that could arise when identifying an appropriate subset of sectoral exposures.    

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that that that due to the current Covid-19 situation the deadline for the submission of comments has been extended to 13 July 2020. All contributions received will be published following the close of the consultation, unless requested otherwise.

The EBA will hold a public hearing on the draft Guidelines, which will take place via conference call on 6 May 2020 from 14:00 to 16:00 Paris time. The dial in details will be communicated in due course.

Legal basis and background

The EBA has developed the draft Guidelines in accordance with Article 133(6) of Directive 2013/36/EU (CRD) in conjunction with Article 16(1) of Regulation (EU) No 1093/2010 (EBA founding Regulation). Guidelines set the EBA view of appropriate supervisory practices within the European System of Financial Supervision or how Union law should be applied.

The European Banking Authority (EBA) launched today a consultation on draft Guidelines on the appropriate subsets of sectoral exposures to which competent or designated authorities may apply a systemic risk buffer (SyRB) in accordance with the Capital Requirements Directive (CRD). These Guidelines aim at setting a common framework to harmonise the design of the appropriate subsets of sectoral exposures to which a systemic risk buffer may be applied, thus facilitating a common approach throughout the EU. The consultation runs until 13 July 2020.