Response to consultation to amend the ITS on procedures, forms and templates for resolution planning
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Also, the remittance date indicated in the paragraph 2 of the Article 9 - Transitional period" seems erroneous. It should be May 31st 2019 and April 30st, 2020.
The envisaged remittance date for all templates is very tight. Indeed, Block 2 and block 3 templates require harmonisation with Financial Statements and FINREP and COREP reports. This will leave a very short window to finalize the reports.
We therefore would suggest that the remittance date remains 31st May for Block 3 templates."
The following data are already required in others reporting, we suggest their deletion in the “Resolution reporting”:
- The “risk exposure amount” (REA; column 090) is already asked in another COREP C 06.
- The “contribution to total consolidated assets” (column 110) is already asked in another FINREP C 40.01.
- The “Contribution to total consolidated REA” (column 120) is already asked in another COREP C 06.
We suggest deleting these 3 columns of the template R 01.00 (R-ORG).
More generally, the addition of metrics in this template (column 090 to 130) makes it more complicated to produce the report, as it mixes Legal and Risk type of information, that are in most banking institutions available in different information systems.
We advise for the deletion of column 90 of which: intragroup" and the inclusion of a global column dedicated to intragroup transactions within “other counterparties”.
The accounting standard of “Resolution reporting” are specified in the paragraph n°1.4 of the appendix II. Nevertheless, it should be specified how to report subsidiaries data in the “Resolution reporting”, when the subsidiary is waived of supervisory requirements.
A line should be added to report "senior non preferred liabilities". Otherwise, it should be specified if "senior non preferred liabilities" have to be reported in line " 370 - Subordinated liabilities (not recognised as own funds)".
Cells that should not be filled in because the data requested are not legally or regulatorily possible should be shaded (eg. covered deposits with credit institutions counterparties).
Template « R 03.00 - Own funds requirements »
Where the entity the report refers to is not subject to individual own funds requirements, the instructions state that the contribution of the entity to the consolidated prudential own funds shall be reported as reported in the COREP template C 06.02 regarding the contribution of entities to the solvency of the group. It is unclear what it means regarding own funds requirements.
Template « R 04.00 - Intragroup financial connectedness »
Since the aim is to declare the intragroup liabilities from the point of entry with the subsidiaries, the concept of ‘MREL eligible’ is not relevant, we suggest deleting this column.
At least, the instructions should clarify that the expected amounts to be filled in must be aggregated by counterparties and not reported for each transactions, and that resolution authorities should not ask for transactional data in the objective to limit the burden on institutions.
Template « R 05.01 - Major counterparties (Liabilities) »
Generally speaking, this information is already required and available in the additional liquidity monitoring metric (ALMM) COREP n°C.67.00. We ask for the deletion of the reporting "R 05.01 - Major counterparties (Liabilities)".
We suggest the NRAs (and the SRB) not to request this template for entities which benefit from a requirement waiver on ALMM from their NSAs (and the ECB).
Moreover, it is too complex and useless to report the data required in column n°060 "Type". We ask for the deletion of this column.
Template « R 05.02 - Major counterparties (off-balance sheet) »
No comment.
Template « R 06.00 - Deposit insurance »
General information on guaranteed deposits are available in R 02, this additional report is time consuming for limited added value."
Technical comment: In template R 10.01 and R 10.02 (Mapping of information systems) one column to report the System Identification Code" (n°010) is not sufficient. Some large and internationally active banking groups have several identification codes. We support that, at least 3 columns, are created to report "System Identification Code"."
Template “R 07.01 - Criticality assessment of economic functions”
We ask for the definition and the calibration of buckets to fill the column n°020 "Market share".
Besides, the market share is very difficult to determine for internationally active credit institutions.
The denominator used for the calculation of the market share should be a national, continental or worldwide geographical zone.
Template “R 07.02 - Mapping of critical functions to legal entities”
No comment.
Template “R 07.03 - Mapping of core business lines to legal entities”
No comment.
Template “R 07.04 - Mapping of critical functions to core business lines”
The “geographical area” (column n°010) should be national, continental or worldwide, to consider the cross-border activity of some internationally active credit institutions.
Flexibility should be permitted regarding the type of functions, in order to address the more appropriate level of geographical consolidation.
Template “R 08.00 - Critical services”
No comment.
Template “R 09.01 - Users, providers and users - mapping to critical functions”
We support the application of a transition period and the introduction of the template R 09.01 three years after the entry into force of the implementing regulation."
Technical comment: In template R 10.01 and R 10.02 (Mapping of information systems) one column to report the System Identification Code" (n°010) is not sufficient. Some large and internationally active banking groups have several identification codes. We support that, at least 3 columns, are created to report "System Identification Code"."
Technical comment: We support the application of a transition period and the introduction of templates R 09.02 and R 09.03 three years after the entry into force of the implementing regulation (see above).
If FMI templates (R 09.01 to R 09.03) are reported every year, they should be reported on May 31st considering their complexity. It will be very complex to report those templates annually by March 31st.
Question 1. Would the envisaged remittance date (31 May to be progressively advanced to 31 March) appropriate for all templates? If not, please justify your answer and indicate, template by template, the alternative remittance date you would suggest.
First of all, we would like to thank the EBA for the improvements brought by the proposed “Resolution templates”. The deletion of redundant information in this proposal constitutes a significant improvement.Also, the remittance date indicated in the paragraph 2 of the Article 9 - Transitional period" seems erroneous. It should be May 31st 2019 and April 30st, 2020.
The envisaged remittance date for all templates is very tight. Indeed, Block 2 and block 3 templates require harmonisation with Financial Statements and FINREP and COREP reports. This will leave a very short window to finalize the reports.
We therefore would suggest that the remittance date remains 31st May for Block 3 templates."
Question 2. Are there any technical obstacles or inconsistencies in the template ‘R 01.00 - Organisational structure (R-ORG)’ which would prevent you from, or make it disproportionate for you, to report the information required thereby?
The template R 01.00 (R-ORG) has a better design than the previous one, but it remains difficult to complete for cross-border banking groups with subsidiaries and branches located out of the European Union.The following data are already required in others reporting, we suggest their deletion in the “Resolution reporting”:
- The “risk exposure amount” (REA; column 090) is already asked in another COREP C 06.
- The “contribution to total consolidated assets” (column 110) is already asked in another FINREP C 40.01.
- The “Contribution to total consolidated REA” (column 120) is already asked in another COREP C 06.
We suggest deleting these 3 columns of the template R 01.00 (R-ORG).
More generally, the addition of metrics in this template (column 090 to 130) makes it more complicated to produce the report, as it mixes Legal and Risk type of information, that are in most banking institutions available in different information systems.
Question 3. Are there any technical obstacles or inconsistencies in the second block of templates (R 02.00 - Liability Structure (R-LIAB), R 03.00 - Own funds (R-OWN), R 04.00 - Intragroup financial interconnections (R-IFC), major counterparties, R 06.00 - Deposit insurance (R-DIS)) which would prevent you or make it disproportionate for you to report the information required thereby?
Template « R 02.00 - Liability Structure »We advise for the deletion of column 90 of which: intragroup" and the inclusion of a global column dedicated to intragroup transactions within “other counterparties”.
The accounting standard of “Resolution reporting” are specified in the paragraph n°1.4 of the appendix II. Nevertheless, it should be specified how to report subsidiaries data in the “Resolution reporting”, when the subsidiary is waived of supervisory requirements.
A line should be added to report "senior non preferred liabilities". Otherwise, it should be specified if "senior non preferred liabilities" have to be reported in line " 370 - Subordinated liabilities (not recognised as own funds)".
Cells that should not be filled in because the data requested are not legally or regulatorily possible should be shaded (eg. covered deposits with credit institutions counterparties).
Template « R 03.00 - Own funds requirements »
Where the entity the report refers to is not subject to individual own funds requirements, the instructions state that the contribution of the entity to the consolidated prudential own funds shall be reported as reported in the COREP template C 06.02 regarding the contribution of entities to the solvency of the group. It is unclear what it means regarding own funds requirements.
Template « R 04.00 - Intragroup financial connectedness »
Since the aim is to declare the intragroup liabilities from the point of entry with the subsidiaries, the concept of ‘MREL eligible’ is not relevant, we suggest deleting this column.
At least, the instructions should clarify that the expected amounts to be filled in must be aggregated by counterparties and not reported for each transactions, and that resolution authorities should not ask for transactional data in the objective to limit the burden on institutions.
Template « R 05.01 - Major counterparties (Liabilities) »
Generally speaking, this information is already required and available in the additional liquidity monitoring metric (ALMM) COREP n°C.67.00. We ask for the deletion of the reporting "R 05.01 - Major counterparties (Liabilities)".
We suggest the NRAs (and the SRB) not to request this template for entities which benefit from a requirement waiver on ALMM from their NSAs (and the ECB).
Moreover, it is too complex and useless to report the data required in column n°060 "Type". We ask for the deletion of this column.
Template « R 05.02 - Major counterparties (off-balance sheet) »
No comment.
Template « R 06.00 - Deposit insurance »
General information on guaranteed deposits are available in R 02, this additional report is time consuming for limited added value."
Question 5. The reporting of FMIs and information systems is already required since 2016. In practice are you operationally able to provide such view and do you think it is necessary to set a transition period, for example to progressively build up over the course of three years a full view of the systems within groups?
We agree with the transition period to progressively build-up a full view of systems and access to local FMI’s, since this is complex information declared in best effort until 2020.Technical comment: In template R 10.01 and R 10.02 (Mapping of information systems) one column to report the System Identification Code" (n°010) is not sufficient. Some large and internationally active banking groups have several identification codes. We support that, at least 3 columns, are created to report "System Identification Code"."
Question 4. Are there any technical obstacles or inconsistencies in the third block of templates (critical functions and core business lines, R 08.00 - Critical services (R-SERV), FMI services, critical information systems) which would prevent you or make it disproportionate for you to report the information required thereby?
In Article 4 - Level of application" of the draft implementing regulation, a longer delay should be granted to declare data of third countries (ie. Countries which are not Member States).Template “R 07.01 - Criticality assessment of economic functions”
We ask for the definition and the calibration of buckets to fill the column n°020 "Market share".
Besides, the market share is very difficult to determine for internationally active credit institutions.
The denominator used for the calculation of the market share should be a national, continental or worldwide geographical zone.
Template “R 07.02 - Mapping of critical functions to legal entities”
No comment.
Template “R 07.03 - Mapping of core business lines to legal entities”
No comment.
Template “R 07.04 - Mapping of critical functions to core business lines”
The “geographical area” (column n°010) should be national, continental or worldwide, to consider the cross-border activity of some internationally active credit institutions.
Flexibility should be permitted regarding the type of functions, in order to address the more appropriate level of geographical consolidation.
Template “R 08.00 - Critical services”
No comment.
Template “R 09.01 - Users, providers and users - mapping to critical functions”
We support the application of a transition period and the introduction of the template R 09.01 three years after the entry into force of the implementing regulation."
Question 5. The reporting of FMIs and information systems is already required since 2016. In practice are you operationally able to provide such view and do you think it is necessary to set a transition period, for example to progressively build up over the course of three years a full view of the systems within groups?
We agree with the transition period to progressively build-up a full view of systems and access to local FMI’s, since this is complex information declared in best effort until 2020.Technical comment: In template R 10.01 and R 10.02 (Mapping of information systems) one column to report the System Identification Code" (n°010) is not sufficient. Some large and internationally active banking groups have several identification codes. We support that, at least 3 columns, are created to report "System Identification Code"."
Question 6. The reporting of FMI services and enabling services, in templates R 09.02 and R 09.03 could be facilitated if a list of typical services was included. Can you suggest such list?
At this stage, we have no proposal for such a list.Technical comment: We support the application of a transition period and the introduction of templates R 09.02 and R 09.03 three years after the entry into force of the implementing regulation (see above).
If FMI templates (R 09.01 to R 09.03) are reported every year, they should be reported on May 31st considering their complexity. It will be very complex to report those templates annually by March 31st.