27 June 2014
The European Banking Authority (EBA) published today its final Guidelines on disclosure of encumbered and unencumbered assets. They are the first step towards a harmonised disclosure framework of asset encumbrance in the EU and have been drafted in accordance with Recommendation D of the European Systemic Risk Board (ESRB).
These Guidelines include a set of principles and templates that will enable the disclosure of all information on encumbered and unencumbered including all central bank operations conducted by institutions.
The EBA has tried to ensure consistency with other disclosure requirements on asset encumbrance; however it should be noted that these guidelines complement rather than substitute other disclosure requirements, especially those stemming from the applicable accounting framework.
The Guidelines are directed at institutions subject to disclosure requirements in Part Eight of the CRR. Institutions will have to disclose information in accordance with the three disclosure templates foreseen in the Guidelines, and provide some additional information on the importance of encumbrance in their individual funding model.
Disclosure on asset encumbrance increases market discipline of institutions and allows the provision of transparent and harmonised information on the topic across EU Member States, so as to enable market participants to compare the institutions in a clear and consistent manner.
The proposed Guidelines have been developed on the basis of Regulation 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms which mandates the EBA to develop guidelines on unencumbered assets, taking into account the ESRB Recommendation of 20 December 2012 on funding of credit institutions.
The EBA is required to issue these Guidelines by 30 June 2014. The Guidelines will be then reviewed after one year and will form the basis for binding technical standards on more extensive disclosure that the EBA is due to develop by 2016.