The European Banking Authority (EBA) launched today a public consultation on draft Regulatory Technical Standards (RTS) related to liquidity requirements for cross-border intragroup financial support under stress conditions. The purpose of these RTS is to specify the additional objective criteria listed in the Delegated Act (Commission Delegated Regulation EU No 2015/61 of 10 October 2014), for the application of a preferential treatment in the calculation of the liquidity coverage requirement (LCR) for cross-border intragroup liquidity flows. The consultation runs until 13 January 2016.
The proposed draft RTS set out in more detail the additional criteria to those envisaged at domestic level that institutions within a group or within an institutional protection scheme (IPS) need to meet in order to be able to apply higher inflows and/or lower outflows on liquidity and credit facilities on cross-border transactions. These criteria, as already specified in the LCR Delegated Act, aim at ensuring the effectiveness of the liquidity support.
In particular, these draft RTS specify how the liquidity provider and receiver shall present a low liquidity risk profile. The liquidity provider shall monitor and oversee the liquidity position of the receiver at least on a daily basis and its contingency funding plan shall ensure through this monitoring that the support to the receiver is guaranteed even in times of stress. In addition, the draft standards detail the necessary legally binding agreements and commitments between group entities regarding the credit or liquidity line.
Comments can be sent to the EBA by clicking on the "send your comments" button on the consultation page of the consultation. Please note that the deadline for the submission of comments is 13 January 2016.
All contributions received will be published following the close of the consultation, unless requested otherwise.
A public hearing for the consultation will take place at the EBA premises on 18 December 2015 from 10:00 to 12:00 UK time.
The proposed draft RTS have been developed on the basis of Regulation 575/2013 (Capital Requirements Regulation – CRR) of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms. These draft RTS are also based on the EBA’s report on the LCR calibration published in December 2013.
The original CRR deadline for the submission of these draft RTS to the European Commission, 1 January 2015, was delayed as the LCR Delegated Act listing the criteria to be developed by the RTS was finally published in the Official Journal only on 17 January 2015. The launch of the EBA’s consultation was further postponed to November 2015, due to some legal formalities to be completed with the European Commission for the final development of the draft RTS.
- Association for Financial Markets in Europe
- Association of German banks
- Austrian Federal Economic Chamber, Division Bank and Insurance
- Deutsche Bank
- European Banking Federation