The European Banking Authority (EBA) launched today a consultation on draft Regulatory Technical Standards (RTS) to specify the treatment of equity exposures under the internal ratings-based (IRB) approach. These RTS will be part of the Single Rulebook aimed at enhancing regulatory harmonisation in the banking sector in the European Union. The consultation runs until 7 July 2014.
These RTS propose that competent authorities grant institutions a temporary exemption from IRB treatment of certain equity exposures if such exemption was being applied on the last day of application of the Capital Requirements Directive I (CRD I) – 31 December 2007.
This exemption, which was introduced in CRD I to partly relieve institutions’ capital requirement for equity exposures under the IRB approach, will end on 31 December 2017 and is deemed to have immaterial impact in most institutions.
Comments to this consultation 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 7 July 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 27 May 2014 from 10:00 to 12:00 hours UK time.
Legal basis and next steps
The proposed draft RTS 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 (Capital Requirements Regulation - CRR).
The EBA must submit the draft RTS to the Commission by 30 June 2014.