The European Banking Authority (EBA) released today its assessment of the annual Pillar 3 reports of a sample of European banks, which relate to the 2014 financial year. This is the first report since the entry into force of the Capital Requirements Regulation (CRR) that assesses banks' compliance against the disclosure requirements laid down in CRR.
The assessment focuses both on those areas where the CRR introduced new disclosure requirements, as well as on aspects where the EBA's previous assessments had identified needs for improvement.
Overall, the EBA has observed an increase in the quality of disclosures but compliance with new disclosure requirements is still work in progress.
Among the areas where improvements have taken place are the provision of clear disclosure indices and the presentation of information on risk model parameters in a tabular format. However, disclosures on own funds and capital requirements could be further improved especially with regards to deductions due to prudential filters and the breakdown of capital requirements by exposure classes. Similarly, disclosures on internal ratings-based (IRB) models could be enhanced for the breakdown of IRB risk parameters by exposures and by geography. Finally, disclosures on the assessment of the global systemically important institutions (G-SII) status, remuneration and asset encumbrance are more satisfactory but could be improved.
This report also compares the revised Basel Pillar 3 requirements issued by the Basel Committee in January 2015 with the current CRR disclosure requirements.