13 June 2014
The EBA launches today a consultation on three Guidelines related to the information that institutions in the EU banking sector should disclose under Part Eight of the Regulation (EU) No 575/2013 (Capital Requirements Regulation - CRR). These Guidelines have been merged into one single document and cover how institutions should apply materiality, proprietary and confidentiality in relation to the disclosure requirements, as well as how they should assess the frequency of their disclosures. This work will enhance consistency in disclosure practices across the EU and are part of the work of the EBA aimed at ensuring transparency in the EU banking sector. The consultation runs until 13 September 2014.
The Guidelines proposed by the EBA provide a common and flexible framework that promotes consistency and enhances transparency on the assessments of materiality, proprietary or confidential nature of information, as well as the frequency of disclosures. They have been drafted taking into consideration existing national provisions in EU member states, work from other fora and best disclosure practices. The new framework provided will improve market discipline and confidence, while taking into account differences in business models of the various institutions across the EU.
More specifically, the Guidelines cover the process that institutions should follow and the criteria they should consider when they assess the use of any waiver related to materiality or to the proprietary or confidential nature of disclosures, as well as the frequency of their disclosure. The Guidelines also indicate the information that should be provided if such a disclosure waiver is used or if an institution chooses to disclose information required by Part Eight of the CRR more frequently than on annual basis.
The assessment of regulatory disclosures carried out by the EBA since 2009 has in fact shown that the concepts of materiality, proprietary and confidentiality are implemented differently by institutions across the EU. While these differences reflect normal divergences among institutions, meaningful and consistent information across the single market reinforces the confidence of stakeholders and market discipline in the EU banking sector.
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 the deadline for the submission of comments is 13 September 2014.
All contributions received will be published following the close of the consultation, unless requested otherwise. A public hearing will take place at the EBA premises on 15 July 2014 from 10:30 to 12:30 hours UK time. To register, click here.
To ensure market discipline (the ability of informed stakeholders to identify risks in financial institutions and to act in a way that signals those risks to other stakeholders), Part Eight of Regulation (EU) No 575/2013 specifies disclosure requirements that institutions have to comply with. They cover all risk areas (own funds, credit risk, securitisation, market risk, operational risk) and provide information about risk management, exposures, RWA and capital requirements. Part Eight of Regulation (EU) No 575/2013 is the EU version of the Pillar 3 of the Basel II agreement, and disclosures provided in accordance with this Part (and before it in accordance with Annex XII of Directive 2006/48) are often referred to as Pillar 3 disclosures.