EBA consults on disclosure of encumbered and unencumbered assets

The EBA launched today a public consultation on draft Guidelines on disclosure of encumbered and unencumbered assets aimed at providing transparent and harmonised information on the subject across EU Member States. The consultation runs until 20 March 2014.

These guidelines provide three disclosure templates that institutions will have to fill in together with some additional information about the importance of encumbrance in their individual funding model.

Disclosure on asset encumbrance increases market discipline and allows market participants to better understand and analyse the liquidity and solvency profiles of institutions. These guidelines are the first step towards a harmonised disclosure framework of asset encumbrance in the EU. They have been drafted in accordance with the Recommendation D of the European Systemic Risk Board (ESRB).

Consultation process

Comments 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 20 March 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 22 January 2014 from 9:30 to 12:00 UK time.

Legal basis and next steps

The proposed draft 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.