Response to consultation on Guidelines on the LCR disclosure

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Question 1: Do respondents have any comment to the scope of application of the draft guidelines?

The disclosure requirements under the CRR/CRD IV are generally too detailed and complex for small, non-publicly traded institutions. The necessity to provide a disclosure report in addition to the financial statements leads to a significant administrative overhead for those small banks. This is even exacerbated by the fact that the disclosure report must be prepared partially in parallel to the financial statements and by the same staff of the banks.

The aim of the disclosure requirements is basically to provide information to potential investors about the financial situation of an institution. With regard to the Bavarian cooperative banks these specifications, however, are overshooting, not only with a view to probably having to publish the LCR. The reason is that their investors" are not institutional investors or rating agencies, but their members and customers. The target group of the cooperative banks’ business information therefore often consists of individuals, to whom any information such as the detailed calculation of the LCR does not offer any benefit.

In addition, the information to be disclosed consists in most cases of requirements towards publicly traded companies. Therefore also the European legislator should proceed prudently and not extend the disclosure requirements of the LCR one-on-one to all European banks. The administrative burden, which is in particular resulting from a possible daily determination of the LCR, would be disproportionate for the cooperative banks compared to the benefit for the supervisory authorities. In particular, the implementation of the technical requirements for the determination of the LCR is extremely complicated and complex. With a view to the complex and inappropriate requirements of disclosing the LCR, the cooperative banks have to be exempted from those disclosure requirements."

Question 2: As currently foreseen, the application date will be in June 2017. Do respondents find the date of application of the guidelines appropriate?

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Question 3: Do respondents consider that the transitional period is sufficiently clear?

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Question 4: Do respondents have any comment relative to the proposed LCR related items prone to rapid change?

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Question 5: Do respondents have any comment relative to the content of the table in Annex I of the draft guidelines and the way to display it?

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Question 6: Do respondents have any comment on the content of the LCR disclosure template in Annex II?

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Question 7: Do respondents have any comment relative to the content of the template on qualitative information on LCR?

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Question 8: What information from Annex II, if any, would respondents consider irrelevant for LCR disclosure purposes?

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Question 9: What information would respondents like to see added to the LCR disclosure requirements?

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Question 10: Do respondents find the general instructions in Annex III sufficiently clear for the development of the disclosure template?

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Question 11: Do respondents consider that the methodology proposed for the LCR disclosure template is, from a practical point of view, operationally feasible meaning that the accuracy of the daily reporting observations for the calculation of the averages can be ensured? Do respondents consider that this operational feasibility could depend on the size of the credit institution or could be different in the case of solo or consolidated data?

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Question 12: Do respondents find the specific instructions in Annex III sufficiently clear for the development of the LCR disclosure template and the template on qualitative information on LCR in Annex II?

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Question 13: In the elaboration of this CP, the EBA has considered several policy options under three main areas: a proportionality approach in the scope of application, items for a higher disclosure frequency and methodology for the calculation of the disclosures. Do respondents have any particular view on the assessment conducted on these policy options?

In order to comply with the principle of proportionality, small and medium-sized banks, like cooperative banks, have to be exempted from disclosing the LCR due to their low-risk business model and their less complex structure. For further information thereto, we refer to our answer on question 1 concerning the scope of the proposed regulations.

Question 14: Do respondents think that the opportunity of having a simplified disclosure template for smaller credit institutions should be assessed? This simplified LCR disclosure template could comprise for example the ratio itself, the numerator and the denominator as key ratios and figures of the LCR, in the sense of Article 435 (1) (f) CRR. What arguments could respondents provide to justify that the LCR ratio itself, its numerator and its denominator are the only key ratios and figures of the LCR which are required to be disclosed by smaller credit institutions? More generally please provide any argument in favor or against a simplified template, and if you believe a simplified template for LCR disclosures is relevant, please indicate which type of information you would like to have disclosed in that template. What specific criteria would respondents suggest to identify those smaller institutions for which a simplified disclosure template could potentially be disclosed?

In order to comply with the principle of proportionality, small and medium-sized banks, like cooperative banks, have to be exempted from disclosing the LCR due to their low-risk business model and their less complex structure. For further information thereto, we refer to our answer on question 1 concerning the scope of the proposed regulations.

Name of organisation

Genossenschaftsverband Bayern e.V. (GVB)