European Savings and Retail Banking Group aisbl / World Savings and Retail Banks Institute aisbl
The provisions in these RTS are clear. We understand the necessity of reporting sufficient data to the regulator and supervisor, in order to properly calibrate the leverage ratio during the monitoring period phase, but we are concerned that disclosing an excessive amount of data regarding the leverage ratio calculation during the review period will not provide useful information.
As the leverage ratio is not yet a binding measure we are concerned that the required data are overly demanding. The LRQua" template for example appears excessive in its request for all processes for managing the excessive risk of leverage together with disclosing data related to encumbered assets or maturity mismatches to be disclosed. We do not understand the necessity to provide the market with such granular information relating to the leverage ratio of institutions. We also do not understand how this measure, which is subject to supervisory review and not subject to quantitative requirements for several years to come, can be assumed to be of such importance to the institutions’ risk management so that internal strategic decisions and processes can be directly linked to it.
From a general point of view we are concerned regarding the requirement to publicly disclose such detailed information during the monitoring period.
We ask that the disclosure of the leverage ratio is required at the consolidated level only as the reporting burden on smaller loosely tied networks (a characteristic of many savings banks) would be disproportionately heavy.
Disclosures should also be limited to an annual frequency and not, as it appears in the current consultation paper, left to the discretion of national authorities to request a higher frequency of disclosures."
We have no comments on this section.
• Regarding the different weights used for the off-balance sheet exposure in template LRCom (rows15-17) we note that these are different to the weights used in the supervisory reporting templates;
• Regarding the requirement to report both point-in-time and quarterly average leverage ratio we ask the EBA to require only a point-in-time figure until the leverage ratio is finalised and becomes a legal requirement in 2018 as the calculation will be subject to change during the review period;
• Regarding article 499.2 we note that the CRR provide institutions with the option to disclose the information on leverage ratio based on just one or both of the definitions of the capital measure. However, LRCom limits this choice by only enabling one of the measures to be disclosed;
• Regarding LRQua we ask what needs to be disclosed in terms of internal strategic decisions and processes impacting leverage ratios as there are concerns within the industry that this will require financial industry to disclose information that is difficult to directly link to leverage ratio and which in addition could be sensitive.
We hope that only general information or information already disclosed is required, for example:
- General information: disclosing the process that was set up to follow the leverage ratio;
- Information already disclosed such as strategic decision taken which has led to a change in the leverage (these decisions should normally have already been described in a press release, if significant).
If the disclosures will mainly be based on reporting data, we agree that there will not be any large additional costs for setting up this new requirement. There will however be an additional burden on human resources during the period prior to finalisation of the leverage ratio definition due to the manual input to the templates.