A number of proposals for technical standards are now ready. They were compiled by EBA and finalised following consultation with the sector. It is now up to the European Commission to ratify them once CRR/CRDIV has been completed. All the standards will automatically apply with immediate effect and need not be transposed into national legislation.
This effectively means that the EBA standards will apply as soon as CRR/CRD IV takes effect. Precisely when this will be is not yet known. If 1 January 2014 is chosen as the start date for CRR-CRD IV, the standards must be largely implemented this year. This implies, among other things, that the new rules will be embedded in the processes of the supervised institutions, while simultaneously being included in the practice of supervision so that DNB can monitor compliance.
Implementation of EBA standards in 2013
The following technical standards will be implemented this year:
- Regulatory capital: this includes the definition of regulatory capital and the instruments that are/are not relevant. The aim is to increase the quality and quantity of the regulatory capital.
- Reports: COREP/FINREP and the large exposures reports have undergone a complete overhaul .They have been harmonised at EU level and now enable reporting to be based on the new CRR/CRD IV rules. If CRR/CRD IV takes effect on 1 January 2014, the first reference date for reporting based on the revised formats will be 31 March 2014. The reliability of the reports will naturally continue to be a key focus area.
- Liquidity and leverage ratios: this is a periodic request for information which is used by EBA to issue recommendations to the European Commission concerning the impact of liquidity requirements on the banking sector, the definition of liquid assets and the impact and effectiveness of the leverage ratio.
Compiling new standards
This year, EBA will continue to develop many new technical standards. The agenda will include new standards covering a wide range of issues, such as credit risk mitigation, internal models, market risk, banking supervision committees, securitisations and remuneration policy.
EBA must submit these standards to the European Commission for ratification by 1 January 2014. It is carrying out its work on the new standards in collaboration with national regulators throughout the EU. DNB is playing an active role in various EBA working parties and committees.