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Source: European Banking Authority

The European Banking Authority (EBA) today launched a public consultation on its draft ITS overhauling the EBA resolution planning reporting framework. The consultation runs until 30 October 2024.

•    These draft Implementing Technical Standards (ITS) on the provision of information for the purposes of resolution plans aim to ensure that resolution authorities have the data they need, thus improving the usability of this reporting framework and enhancing a consistent monitoring of resolution planning.
•    These draft ITS will further harmonise reporting requirements in the EU and avoid duplication of data requests, thus reducing the cost of compliance with resolution planning reporting obligations by institutions. 
•    Proportionality is a key driver of this regulatory product. Therefore, the streamlining of datapoints to avoid overlaps is based on the size and complexity of institutions.

The main proposals included in this consultation paper include bringing forward the submission deadline for reporting from April 30 to March 31, an extension of the scope of entities for which data is collected, and an expansion of the information requested on some topics, in particular organisational structure, granular liability data, critical functions, financial markets infrastructures data, critical services and critical information systems. The changes reflect some of the information that resolution authorities are already, and separately, collecting from their institutions, notably that collected by the Single Resolution Board.

Consultation process and next steps

Comments to the consultation paper can be sent to the EBA by clicking on the “send your comments” button on the consultation pages. Please note that the deadline for the submission of comments is 30 October 2024. All received contributions will be published at the end of the consultations, unless requested otherwise.

A public hearing on the draft ITS will take place via online meeting on 12 September 2024 from 10:00 to 11:30 CET. Please register for the hearing here by 9 September 16:00 CET.

Following the consultation period, the draft ITS will be finalised and is expected to be submitted to the European Commission by March 2025.

Legal basis and background

The Bank Recovery and Resolution Directive (BRRD) requires resolution authorities to draw up resolution plans that outline the actions to be taken in case an institution meets the conditions for resolution. The ITS on procedures, standard forms and templates for the provision of information for the purpose of resolution plans sets out a procedure that should be followed when resolution authorities require information about an institution for the purpose of drawing up a resolution plan. 

Source: European Banking Authority

The European Banking Authority (EBA) published today final Guidelines that extend the existing Joint Committee Guidelines on complaints handling (JC Guidelines) to credit servicers under the new Credit Servicers Directive. When handling complaints from borrowers, credit services are now required to apply the same effective and transparent procedures that have been applied for more than a decade to other firms in the banking, insurances and securities sectors.

The Guidelines cover the complaints management policy, the complaints management function, the registration of complaints, the reporting to the competent authorities or ombudsman, the internal follow-up, the provision of information to the complainant, and the procedures for responding to complaints (e.g. investigation of the complaint, communication of the decision and delay to do so).

In addition to the extension of the scope of the Guidelines to credit servicers, the EBA has introduced some non-substantive changes so as to align the Guidelines with the amendments made to the EBA Regulation in 2020. The latter changes allow the EBA to delete procedural requirements addressed to national authorities and which are now no longer required.

The EBA Guidelines, and the consolidated version of the JC Guidelines (see Annex of the final Report), will be published in all 24 languages in 2025, once the proposed EU Payment Services Regulation enters into force and the EBA Regulation is amended accordingly.

Background and legal basis

The EBA developed these Guidelines in support of the transposition of Article 24 (1) of the Directive (EU) 2021/2167 on credit servicers and credit purchasers (Credit Servicers Directive, also referred to as the ‘NPL Directive’ or ‘Loan Servicers Directive’), which provides that “Member States shall ensure that credit servicers establish and maintain effective and transparent procedures for the handling of complaints from borrowers”.

Source: European Banking Authority

Source: European Banking Authority

Consultation process

Legal basis and background

Source: European Banking Authority

The European Banking Authority (EBA) today published a Report on structured deposits in the European Union (EU), under the Markets for Financial Instruments Regulation (MiFIR) to monitor this particular market segment. The Report finds that in more than half of the 27 national markets in the EU, structured deposits do not exist, and that the EU market remains very small at an aggregate level, with only €16.7 billion of structured deposits sold between 1 January and 30 September 2023 – the reference period of the Report -, and 95% of which was concentrated in only 4 EU Member States.

These 4 EU Member States were also the few jurisdictions for which increases in the number of products offered and volumes sold were reported, albeit at a very low level. Across the EU, the total value of structured deposits sold in a given Member State ranges from €2 million to €10 billion, showing a disparity in market penetration and investor interest.

The Report also measures the cost and past performance of structured deposits, in response to a request from the EU Commission to report this information. The limited performance data available indicates that the annual net returns for structured deposits vary significantly, with some structured deposits offering no return, while others showing positive returns, in one case up to 24%.

The Report also confirms an observation the EBA had made previously when it carried out a similar exercise whose findings were published in 2019, which is that robust data on national markets for structured deposits is difficult to obtain due to their specific characteristics. In particular, structured deposits, unlike most financial instruments are non-transferable agreements between the provider and the depositor, which makes them less liquid. In addition, information about these products is less accessible to the public.

Background and Legal Basis

Articles 39(2) and 41(1) of MiFIR mandate the EBA to monitor the market for structured deposits and to temporarily prohibit or restrict the marketing, distribution or sale of structured deposits. In addition, the European Commission has requested that the EBA issues recurrent reports on the cost and past performance of structured deposits.

With this Report, the EBA fulfils its mandate under MiFIR and the European Commission’s request.

Similar to the EBA 2019 Report, this Report describes the typical features of structured deposits, the disclosure and reporting requirements, and data sources. It assesses national markets for structured deposits, including their size, cost and past performance and provides an overview of the risks to investors as well as of supervisory activities taken by national competent authorities. The Report also outlines measures the EBA could put in place to improve potential future iterations of this assessment.

Source: European Banking Authority

The three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) published today the second batch of policy products under the Digital Operational Resilience Act (DORA). This batch consists of four final draft regulatory technical standards (RTS), one set of Implementing Technical Standards (ITS) and 2 guidelines , all of which aim at enhancing the digital operational resilience of the EU’s financial sector.

The package focuses on the reporting framework for ICT-related incidents (reporting clarity, templates) and threat-led penetration testing while also introducing some requirements on the design of the oversight framework, which enhance the digital operational resilience of the EU financial sector, thus also ensuring continuous and uninterrupted provision of financial services to customers and safety of their data.

The ESAs are publishing the following final draft technical standards:

The set of guidelines include:

• Guidelines on the estimation of aggregated costs/losses caused by major ICT-related incidents; and
• Guidelines on oversight cooperation.

Next steps

The guidelines have already been adopted by the Boards of Supervisors of the three ESAs. The final draft technical standards have been submitted to the European Commission, which will now start working on their review with the objective to adopt these policy products in the coming months. The remaining RTS on Subcontracting will be published in due course.

Legal basis and Background

The final draft technical standards have been developed in accordance with Articles 20(a), 20(b), 26(11) and 41(1) of DORA (Regulation (EU) 2022/2554). The guidelines have been drafted based on Articles 11(1) and 32(7) of the same regulation.

The public consultation on all the above-mentioned technical standards and guidelines took place from 8 December 2023 to 4 March 2024. The ESAs received more than 364 responses from market participants (265 for the technical standards and 99 for the two guidelines), including a joint response from ESAs’ stakeholder groups. The RTS on JET has been consulted on separately from 18 April to 18 May and brought forward 9 responses from stakeholders. All these public consultations led to specific changes to the technical standards, ensuring simplification and streamlining of the requirements, greater proportionality and addressing sector-specific concerns.

As mandated by Article 20 of DORA the ESAs have consulted with the European Central Bank (ECB) and European Union Agency for Cybersecurity (ENISA) for the technical standards relating to incident reporting.

Source: European Banking Authority

The European Banking Authority (EBA) welcomes the entry into force of the new European Banking Package, which implements the final Basel III framework into EU regulation. To ensure a smooth operational implementation of the Banking Package, the EBA encourages institutions and competent authorities to engage in an active dialogue.

In particular, institutions should:

• communicate to their competent authorities the targeted model landscape, in particular following the migration of exposures to the foundation approach (F-IRB) and standard approach. A key aspect is to ensure that rating systems perform adequately on their scope of application;
• assess and categorise changes coming from the implementation of the Capital Requirements Regulation (CRR3) that impact the performance of a rating system according to the EU Commission’s Delegated Regulation on materiality of changes to the IRB approach. On the other hand, changes coming from the implementation of CRR3 that do not impact the performance of a rating system should not be considered under the scope of the Commission’s Delegated Regulation on model change to the IRB approach;
• share with their competent authority an implementation plan on the foreseen modelling updates that are linked to future EBA supervisory products. In this context, modelling updates in relation to credit conversion factor (CCF) parameters (e.g. 12 months fixed horizon reference date) may not need to be prioritised until the date of application of the EBA Guidelines on IRB-CCF.

Source: European Banking Authority

The three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) will establish the EU systemic cyber incident coordination framework (EU-SCICF), in the context of the Digital Operational Resilience Act (DORA), that will facilitate an effective financial sector response to a cyber incident that poses a risk to financial stability, by strengthening the coordination among financial authorities and other relevant bodies in the European Union, as well as with key actors at international level.

Over the coming months, the ESAs will kickstart the implementation of the framework by setting up:

• the EU-SCICF Secretariat, supporting the functioning of the framework;
• the EU-SCICF Forum, working on testing and maturing the functioning;
• the EU-SCICF Crisis Coordination, facilitating during a crisis the coordination of actions by the participating authorities.

The ESAs will identify legal and other operational hurdles encountered during the initial set up and report these to the European Commission. The further development of the framework will be subject to the availability of resources and other measures taken by the European Commission.

Background

On 2 December 2021, the General Board of the European Systemic Risk Board (ESRB) adopted Recommendation ESRB/2021/17, and approved the associated report “Mitigating systemic cyber risk”, after identifying a shortfall in the existing crisis management frameworks that could lead to a lack of financial sector coordination in the event of a significant cross-border information and communication technologies (ICT) incident with systemic implications.

The ESRB recommended the ESAs to build on the role foreseen in the Digital Operational Resilience Act (DORA), and to gradually develop a pan-European systemic cyber incident coordination framework (EU-SCICF).

In July 2023, as a first step towards putting the Recommendation into practice, the ESAs, the ECB and the Member States, from their relevant national authorities, designated a main point of contact for the EU-SCICF and informed the secretariat of the ESAs of this designation. This point of contact is to facilitate the development of the framework and will be involved in the crisis process of the EU-SCICF.

Source: European Banking Authority

The Banking Stakeholder Group (BSG) of the European Banking Authority (EBA) today held its first meeting in its new composition. The renewed BSG is the sixth one since the establishment of the EBA in 2011, and was agreed by the EBA Board of Supervisors at its meeting on 25 June 2024. The 30 selected members started their four-year mandate on 1 July 2024. Their role is to facilitate consultation and dialogue with stakeholders in all the areas relevant to the tasks of the EBA.

Welcoming the new BSG members, the EBA Chairperson Jose Manuel Campa said, “With the diverse perspectives and expertise within this balanced group, I am confident that the BSG will provide valuable contributions to the EBA work. I look forward to a fruitful collaboration between  the members for the benefit of the EBA and its stakeholders.“

Legal basis and background

The BSG is set up according to Article 37 of the EBA Founding Regulation, to help facilitate dialogue and consultation with stakeholders on the work of the EBA.

The BSG is composed of 30 members who serve for a period of four years with the possibility to be renewed for an additional term.

Source: European Banking Authority

The European Banking Authority (EBA) today published a report on the application of derogations to the requirements to pay out a part of the variable remuneration for identified staff under deferral arrangements and in instruments that are available to small and non-complex institutions and for identified staff receiving only a relatively small amount of variable remuneration. This report forms part of the EBA’s contribution to the review to be performed by the European Commission.

The report aims to assess the implementation and application of derogations within the EU and their impact on the costs, risk alignment of variable remuneration to the risk profile of the institution as well as on the ability to recruit and retain staff.

Notably, prior to the explicit introduction of CRDV derogations, the national implementations of the CRD permitted small and non-complex institutions and staff receiving relatively low variable remuneration, to waive specific requirements based on proportionality grounds. Consequently, assessing the impact of CRDV changes remains challenging as it is limited to marginal changes to the regime that today applies with more harmonised thresholds.

Legal basis and next steps

Article 94(6) of Directive 2013/36/EU mandates the European Commission, in close cooperation with the European Banking Authority (EBA), to review and report on the application of derogations under Article 94(3) and (5) CRD regarding the requirements to pay out the variable remuneration of identified staff partly under deferral arrangements and in instruments.

The EBA has submitted the review report to the European Commission and stands ready to provide further input into the development of the report to be submitted by the Commission to the European Parliament and the Council.