The European Banking Authority (EBA) launched today a consultation on its Guidelines regarding the types of exposures to be associated with high risk under Article 128 (3) of the Capital Requirements Regulation (CRR). The Guidelines specify which types of exposures, other than those mentioned in Article 128 (2) CRR, are to be associated with particularly high risk and under which circumstances. The Guidelines also clarify the notion of investments in venture capital firms and private equity. The consultation runs until 17 July 2018.
In line with the mandate for the EBA in Article 128 (3) CRR, this consultation paper is seeking views on the exposure classes that could contain high-risk items. In addition, it specifies the method, which institutions can use in order to inform supervisors about the occurrence of high-risk items in their portfolios, which are considered as structurally different from common exposures of the same asset class.
The EBA also included the clarification regarding the notion of investments in venture capital firms and private equity. The aim is to provide guidance and ensure harmonisation regarding the type of exposures considered as investments in venture capital firms and private equity.
Responses 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 17 July 2018. A public hearing will take place at the EBA premises on 4 May 2018 from 11:00 to 12:30 UK time.
Legal basis and next steps
The EBA has developed these Guidelines in accordance with the EBA Regulation, on the basis of the EBA's mandate in Article 128 (3) CRR regarding the items associated with particular high risk.
The Guidelines should be implemented by 1 January 2019.