EBA analyses the use of specific exemptions included in the large exposures regime

The European Banking Authority (EBA) published today a Report on the use of some exemptions included in the large exposures regime. The Report analyses banks’ use of the various exemptions from different perspectives and quantifies the impact of a potential removal of individual exemptions. Overall, the Report shows that some of the assessed exemptions are widely used across the EU and their removal would have a material impact while other exemptions are widely used across the EU but their removal would not have material impact. In addition, some exemptions are relevant only for some countries or appear to be rarely used.

The Report provides detailed quantitative evidence about the use of the exemptions, as of June 2021, but does not contain any policy recommendations. The EBA has started a specific data-collection exercise regarding the use of some of the large exposures exemptions/exclusions provided in the Capital Requirements Regulation (CRR) and amended by the CRR2.

The EBA assessed the use of the various exemptions in each Member State from different perspectives: the number of large exposures exempted; the number of institutions that make use of the exemption; the aggregate amount of exposures exempted. The impact of the removal of the exemptions was also measured.

Legal basis and background

The Report has been developed in compliance Article 507(1) of Regulation (EU) No 575/2013 amended by Regulation (EU) No 876/2019 that mandates the EBA to monitor the use of exemptions included in the Large Exposures regime.

The EBA has carried out the analysis on a sample of 181 institutions from 25 EU/EEA countries, which has been developed in collaboration with experts of the national competent authorities (NCAs) and national central banks (NCBs. The sample composition was meant to ensure the representativeness for the institutions in scope. Even if the sample also includes some local/regional institutions as well as subsidiaries of EU institutions, it is more representative of the large institutions, and for some jurisdictions, the small institutions are underrepresented in the sample.