Call to EBA for equal treatment of actors when accessing consumer payment accounts

The European Savings and Retail Banking Group (ESBG) welcomes the opportunity to respond to the public consultation from the European Banking Authority (EBA) on the amendment of its Regulatory Technical Standards (RTS) on Strong Customer Authentication and Secure Communication (SCA&CSC) under the Payment Services Directive (PSD2) with regard to 90-day exemption from SCA for account access.

ESBG and its members strongly disagree with the EBA’s claim that banks fail to provide user-friendly Strong Consumer Authentication (SCA) methods and that its application often causes friction in the customer journey. Instead, ESBG calls for equal treatment of actors when accessing consumer payment accounts.


GSB honoured with APEA for Corporate Excellence 2021

WSBI’s member in Thailand received prestigious award.

Brussels, 1 July - Government Savings Bank (GSB), WSBI’s member in Thailand, received the prestigious Asia Pacific Enterprise Awards (APEA) 2021 for ‘Corporate Excellence’ in the category of financial business on a virtual ceremony on 30 June.

The APEA are awarded by Enterprise Asia, an independent organisation that supports the development of business capabilities to promote leading entrepreneurs across the continent.

The ‘Corporate Excellence’ award recognises an organisation with excellent management, outstanding performance that reflects efficient operations, sustainable growth and an integrated learning to develop the potential of employees.

This award particularly recognises Government Savings Bank for its operations to help entrepreneurs and SMEs to improve their incomes and life quality, reducing social inequality. This is in line with the government’s policy and GSB’s social commitment and mission.


ESBG Response to Questionnaire on VAT rules for financial services

The exemption of financial and insurance services from VAT was introduced in 1977 as an exception to the general rule that VAT is to be levied on all services supplied for consideration by a taxable person.

The definitions and their interpretations need an adaptation, development and harmonization, which in our view is necessary to avoid discrepancies in the application of the exemptions and to contribute to legal security. More specifically, the VAT exemptions are too tight, and the definitions of exempted services are not up to date. They are not taking care of digitalized business approaches and banking services. Moreover, the division of work processes is not reflected properly, e.g. payment services: preparatory services are taxable. A modern definition of effort pooling would be needed and, again, the overall legal certainty could be increased. The lack of input tax deduction or the input tax allocation are a problem in some Member States (definitive cost burden). Outsourcing regularly is taxed. They can not use Cost Sharing Arrangements.




Single European Access Point for Financial and Non Financial Information

ESBG welcomes the opportunity to comment on the European Commission's proposal to establish a European Single Access Point (ESAP).

This tool was already listed as one of the sixteen actions to carry out in the framework of the Capital Markets Union. The ESAP has been designed as a very ambitious tool with the aim of collecting financial and non-financial information. ESBG members would like to highlight the need of taxonomies regarding non-financial information. Companies already make an important effort to comply with all reporting’s required at international and national level. Although the Commission mentions in the consultation document that ESAP is a voluntary tool, ESBG believes it is very important to emphasize this feature and in a first stage it should be configured as a voluntary tool.




ESBG stresses economic impact of data flows outside European Union

BRUSSELS, 22 December 2020 –​ ESBG, together with 17 other European associations recently signed a joint statement on the European Data Protection Board supplementary measures. ESBG points to the impact of data flows for Europe: Whether for consumers buying products or services through their bank accounts, medical research or suppliers collaborating to overcome a health crisis, paymasters remunerating employees, travellers booking a flight or a hotel.

ESBG considers that the current draft recommendations released by the European Data Protection Board (EDPB) will make Europe’s ability to operate within the global economy unreasonably impractical. The draft recommendations are overly prescriptive, mandate specific technical measures in all situations and focus on unworkable end-to-end encryption. The draft recommendations create legal uncertainty and hamper the free flow of data, causing a negative impact on digital trade and the benefits it offers Europe’s society.


​​​​Distance Marketing

ESBG believes that providing simple and shorter information to consumers will correspond more with the clients’ expectations and will have a positive effect on their well-informed decision.

Special attention needs to be paid to the information to be provided to consumers before entering into an agreement. We believe that it is necessary to assess how much detailed information is required and how it can best be provided to consumers in order to ensure that they are well-protected.

Simplification of information

The DMFSD requires service providers to give excessively detailed information to the consumer prior to entering an agreement. Consumers often ignore information which is too complex or difficult to remember and there is evidence that simpler information with fewer figures is much more effective at landing critical messages.

Reduction of information

Regarding the pre-contractual information, it is important to focus on diminishing the number of pre-contractual documents, which service providers are obliged to serve to consumers in any case. Mobile devices can only display a limited amount of information in a clear and comprehensive way.

The way the information is provided and right of withdrawal

ESBG believes that detailed contractual terms and conditions and the information referred to in Article 3(1) and Article 4 from the Directive should be provided to the consumer on paper/another durable medium after concluding the contract (as stated in Art. 5 (2)). Even though the consumer might not have had the possibility to read all of the relevant information, they would still be protected under the right of withdrawal.

The right of withdrawal is an instrument for the consumer’s protection and when it is granted to the consumer it should diminish some of the requirements for the service providers, especially in the field of the pre-contractual information that needs to be provided to consumers. If the amount of information is not diminished, there is not a substantial meaning of the right of withdrawal.

Coherence with other pieces of legislation

The provisions of the Directive are not entirely coherent with the Consumer Credit Directive, the Mortgage Credit Directive, the Payment Services Directive, the Payment Accounts Directive, the Insurance Distribution Directive, the Markets in Financial Instruments Directive, the Packaged Retail Investment and Insurance Products and Services Directive – about the information due before signing the agreement.

GDPR, E-privacy Directive, E-commerce Directive – about the consent for direct marketing and unsolicited communications

In order to achieve a coherent and easy to apply legislation in the matter of distance marketing of financial services, we would like to stress on the regulatory approach – it would be very useful if the Directive includes only the specific requirements for the distance marketing of financial services and if there is a specific product legislation, the Directive refers to the applicable parts of this specific legislation instead of repeating them.


The tendency of Member States’ goldplating practices, as observed with the DMFSD, adds costs and limits the effectiveness of the EU legislation in building the single market. The European Commission should ensure a strict implementation of this Directive, which will give consumers better visibility on their level of protection in Europe.​

Identified Concerns

Some ESBG members believe that the revision of the DMFSD is both important and necessary, as it questions the efficiency of its provisions that aim at consumer protection, compromises the service itself and contradicts one of the basic principles of the distance marketing of financial services – that the service should be easy, accessible and time saving. Nevertheless this does not mean that the way distance marketing should be done should overburden the service providers.

The Directive did not anticipate that technological disruption and new digital means have brought a diverse set of innovative distribution channels. This is the main reason why some ESBG members believe that the DMFSD should be reviewed in order to adapt the legislation to the new technology and distribution channels that have emerged from the new digital context. It should also be applied to regulation and supervision on marketing, advertising and risk reporting to the services provided by new operators as those applicable to financial institutions, when rendering the same services because the purpose thereof is to protect consumers and, therefore, they must not discriminate based on who provides/offers the product or service.

ESBG is also keen to comment on some of the issues raised in the behavioural study on the digitalisation of the marketing and distance selling of retail financial services. We do not agree with attitude surveys and research suggesting that personalisation and targeting tend to be negatively perceived by consumers. Current marketing practices allow customers to receive information about unknown products. These practices must fulfil with the relevant legislation (GDPR and e-privacy) and additionally it is important to underline that the consumers always have the right to request stop receiving this advertisement information. In particular, some ESBG members are of the opinion that the format requirements for standardising product-specific legislation is a step too far and that the obligation for clear and intelligible information in product specific regulation is already sufficient. In addition, using regulation to slow down the purchasing process for financial products and services would reduce the benefit of banks’ investments for attractive and competitive customer experiences and would lead to a deterioration in the customer experience of all customers in response to possibly excessive behaviour of a minority.​

Why Policymakers Should Act

The current DMFSD is 18 years old and there have been many developments in the banking sector since then. It is important to update the text and take into account:

  • new market players;
  • digitalisation – financial services for consumers are nowadays presented, proposed and used in a very different business environment where technologies have a major role;
  • consumers want to receive clear and manageable information in a short time;
  • it is important not to overburden the consumers with information;
  • the right of withdrawal is an instrument for the consumers protection and when it is granted to the consumer it should diminish some of the requirements for the service providers, especially in the field of the pre-contractual information that needs to be provided
  • other EU texts which have been implemented since the financial crisis and should be consistent with the Directive. It should also state which of the requirements of the specific legislation (such as CCD, MCD, PSD 2 etc.) should be kept when distance marketing is executed.

The regulation should also avoid using the references to “vulnerable consumers”. The ECJ literature generally addresses an “average consumer who is reasonably well-informed”. To ensure legal coherence, the Directive should be grounded on the “average consumer” and not on the “vulnerable consumer”.


The development of a deeper and fairer single market is one of the European Commission’s key priorities. As part of this objective, the European Commission is working to help consumers to access good quality financial services offered outside their home Member State by harmonising consumer protection rules governing distance marketing. The Distance Marketing of Financial Services Directive (DMFSD) sets out what information a consumer should receive about a financial service and its provider before concluding a distance contract. For certain financial services, it also gives the consumer a 14-day right of withdrawal. In addition, the DMFSD bans services and communications from suppliers that a consumer has neither solicited nor consented to receive.

Since its adoption in 2002, several pieces of product-specific EU legislation have been adopted in the areas of consumer credit, mortgages, payment accounts, payment services, insurance products and investment products. These acts specify, for instance, the type of information a consumer should receive about a product and its provider. The legal framework also includes general consumer protection rules on unfair commercial practices and unfair contract terms, as well as rules on the e-commerce framework, data protection and e-privacy.


Prudential treatment of software investments

In today’s digital era, the current approach of the EU-Legislator to the capital treatment of software assets is a disadvantage in comparison with non-EU banks and FinTech Companies and must be tackled in order to achieve a level playing field, preserve fair competition and advance technological innovations and digitalisation in the financial (banking) sector. Furthermore, banks can be encouraged to foster investment in digital solutions and/or IT systems only if software is not treated differently than other (e.g. tangible) assets and can be non-deductible.

Additionally, we advocate that the exemption rule for avoiding capital deduction should be optional (opt-out) for certain institutions. For institutions that have hardly any software assets capitalised, the cost of implementing the prudential amortisation approach would be disproportionate to the capital savings. The institutions in question should therefore have the option of continuing to deduct the software assets in full from CET 1.

The EBA provides some relief when it comes to the capital treatment of software, but it is still far too restrictive and inefficient in comparison to the US/Swiss Model. The prudential treatment of software assets in Europe should not penalize innovation. At the same time, banks need flexibility in cases where the benefits do not compensate the cost, Therefore, an option to not apply the RTS would be welcomed by certain institutions. This may lead to situations where implementation of the new approach will not be completely supported and continuation of complete deduction of the software from CET 1 would be preferred instead. If the RTS is too burdensome a possibility to opt out and not apply, it may become important for some financial institutions. Another possibly not very well accepted point is the proposed time period for the prudential amortization which is deemed extremely short.

Identified Concerns​

Article 36 (1) (b) CRR 2 states that the decisive criterion for the exception is that the value of software assets is not negatively affected by resolution, insolvency or liquidation. This provision could be interpreted that the exception applies to software assets, where the value does not materially suffer in a crisis. In addition, the Art. 36 (4) CRR 2 mandates EBA to define a threshold below which the software is affected to an extent that it cannot be deducted from the CET 1 Capital. Banks should focus on the turning point from which the software assets would be negatively affected by the resolution, insolvency or liquidation to a degree that the exemption in Art. 36 (1) (b) CRR2 would not be applicable.

We do not see a simplification but rather a complication having another amortization for prudential purposes. In our view, a pragmatic approach is, as stated above, to trust in the work of external auditors and apply the accounting amortization rules for prudential purposes as well.

If regulators want to include a certain margin of conservatism or prudence in the valuation of software assets, an easy-to-implement haircut on top of the accounting amortization would be the most efficient way for implementation.

Why Policymakers Should Act​

Therefore, it needs to be ensured that EBA develops clear criteria to specify the materiality of negative effects on the values, which do not cause prudential concerns, and provides comprehensive guidance on how to perform this assessment in a way that is not unnecessarily burdensome and complex.

Furthermore, we would prefer the RTS to enter into force already on the day following its publication in the OJ (instead of twenty days thereafter; see Article 2 of the Draft RTS on p. 28). This would ensure that banks can apply these provisions as early as possible (as intended by the CRR Quick Fix). Alternatively, we propose a (possibly also retroactive) application of the provisions as of 30 September 2020 and therefore we request such a provision to be added to Article 2.

Finally, in light of the short consultation period as well as the CRR Quick Fix, we would like to express the need to prioritize the work on this RTS and faster finalization of the RTS. Otherwise, the process would counter the efforts of EU legislators and wouldn’t allow for fast relief for banks.


As part of the Risk Reduction Measures (RRM) package adopted by the European legislators, the Capital Requirements Regulation (CRR) has been amended and introduced, among other things, an exemption from the deduction of intangible assets from Common Equity Tier 1 (CET1) items for prudently valued software assets, the value of which is not negatively affected by resolution, insolvency or liquidation of the institution. In addition, the EBA was mandated to develop draft RTS to specify how this provision shall be applied.

These EBA draft RTS specify the methodology to be adopted by institutions for the purpose of the prudential treatment of software assets. In particular, these draft RTS introduce a prudential treatment based on their amortisation, which is deemed to strike an appropriate balance between the need to maintain a certain margin of conservatism in the treatment of software assets as intangibles, and their relevance from a business and an economic perspective.​


Financial Reporting (IFRS)

  • IBOR: European legislators should not underestimate issues related to the IBOR reform. We consider that due to the possible extent of the instruments facing this issue it should be in the IASB’s attention. Especially IBOR rates with longer tenors replaced by lagged ’in advance’ rates resulting in time gaps of three and more months would be of a particular concern, due to a high risk of failing the solely payments of principal and interest (SPPI) benchmark test. Central authorities in many jurisdictions decided that no forward-looking term rates will be officially provided and consequently the alternative benchmark rate has an imperfect time value of money element.
  • IFRS 17: ESBG believes that the standard cannot be acceptable without a solution to all issues, as certain business models would not be faithfully portrayed under the current requirements of the standard. A high-quality standard does not correctly reflect certain contracts issued by ESBG members, that represent long-term lifesaving products managed under cash flow matching and, to a certain extent, participating contracts, through its measurement nor its presentation requirements.
  • PFS: Regarding the requirement to disclose tax and non-controlling interest (NCI) effects for each reconciling item, there are strong doubts whether this is substantiated on cost/benefit basis. We consider that the IASB should provide at least 24 months for implementing after the new standard is issued.

Identified Concerns

The major points of concern identified by the ESBG members are the following:

  • New proposed IFRS do not consider the business models that entities have in place; therefore not portraying faithfully their financial position and limiting the production of useful information.
  • The need to have enough and reasonable time to implement any new requirement on a timely manner.
  • Costs of implementing proposed new requirements and the likely ongoing associated costs and benefits of each new IFRS Standard.
  • The possible broader economic consequences of new financial reporting requirements, particularly on financial stability.

Why Policymakers Should Act


IBOR (Interbank Offered Rate) Phase II – Recent market developments have brought into question the long-term viability of some interbank offered rates (IBORs). IBORs are reference interest rates which are used as benchmarks for a broad range of financial products and contracts. We are of the opinion that it contributes to provide relevant and useful information about financial instruments and hedging transactions presented in the financial statements by avoiding unexpected accounting consequences that the IBOR reform could have caused under the current standards. The proposed amendments will avoid discontinuing hedging relationships when the hedged items and hedging instruments become modified and the related hedging documentation amended accordingly due to the sole IBOR reform. SPPI-CHF is a real problem and shouldn’t be discarded – ‘In advance’ rates bring time lack when working with historical data. In general, the conclusion is that this issue is not related to IBOR, it may be a consequence of it, but mostly it is an issue how do you apply IFRS9 and not directly related to IBOR reform.


IFRS 17 Insurance contracts sets out the requirements an entity must apply when accounting for insurance contracts issued and reinsurance contracts entered into. Ongoing implementation projects, however, have identified the need for more time and for improvements to the standard in order to address issues that impact on meaningful reporting and introduce significant operational challenges. ESBG continues to support a high-quality standard for insurance contract accounting. If a solution for the annual cohorts issue is rejected during the discussion at a global level, careful attention should be given to the conclusions of this topic for European endorsement purposes.


The IASB does not actually address the presentation of the income statement of financial conglomerates (bank and insurance main business activities). The presentation of insurance business within the income statement of a bank-insurer raises the issue of a by-nature or byfunction presentation of operating costs. It is difficult to evaluate which approaches are compliant – the one of IFRS 17 or the one of PFS IAS 1. The P&L presentation issue at group level for a financial conglomerate is a key issue also for financial communication purposes. General disclosure requirements are welcome. But it will be burdensome to prepare the information for reconciliation of Management Performance Measures (MPMs). The definitions of integral and non-integral associates are also questionable. There are not big issues when the associate is located in the same country as the parent. But when it is located in a foreign country, the influence the parent has on the activities of the associate show a certain dependency, but not the same as the IASB proposes. Examples were given also for issues with the new mandatory subtotals for operating activities- they are very formal and not helpful for all institutions. In this case the subtotals are so similar to the overall P&L that creating them would not be of big importance.


International Financial Reporting Standards (IFRS) set common rules so that financial statements can be consistent, transparent and comparable around the world. IFRS are issued by the International Accounting Standards Board (IASB). They specify how companies must maintain and report their accounts, defining types of transactions and other events with financial impact. IFRS were established to create a common accounting language, so that businesses and their financial statements can be consistent and reliable from company to company and country to country. The current suite of IFRS consists of 25 IAS, 17 IFRS and 18 Interpretations. 144 jurisdictions require IFRS or 87% of the world. IFRS are designed to bring consistency to accounting language, practices and statements, and to help businesses and investors make educated financial analyses and decisions.​


​​​Non-financial reporting with a sense for proportion

Companies, including the financial sector, are acknowledging the benefits that an improved non-financial reporting can have in order to improve the competitiveness of the company, CEO engagement in Environmental, social and governance (ESG) matters, accountability; the integration of externalities risk assessments, financial assessments, as well as to mitigate negative impacts on the climate while building trust with stakeholders.

Non-financial reporting has become a more and more important issue. It can improve the competitiveness of a company, the involvement of management and build trust with stakeholders. Reporting and disclosure obligations have to be effective, delivering the data really needed but in a lean and manageable way. Unnecessary administrative burden for citizens and companies should be avoided. Finally, while supportive of the implementation of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), savings and retail banks nonetheless draw attention to the issue of data availability in relation to the proposed indicators. 

From a financial perspective, non-financial disclosures from corporates enhance data availability on the market and hence set the path towards reallocation of capital flows to more sustainable economic sectors, while avoiding greenwashing. Indeed, the issue of data availability for banks is recurrent when it comes to disclose non-financial performance of their balance sheet. Another difficulty arises from the implementation of those disclosure requirements: to the diversity of business activities adds the ongoing improvement of assessment methodologies that will require time to develop, test and validate before being effective. For these reasons, non-financial reporting should remain reliable and as flexible as possible and companies should be able to choose the reporting strategy and guidelines that fits better their strategies and position, considering information related to the four main topics – environmental, social and employee matters, respect for human rights, and anti-corruption and bribery matters – and the principle of materiality.

Identified Concerns

Non-financial reporting has to change – it is not broken; but it will be unless it changes. It has gotten better at showing what is valuable for companies. Reporting is important for better business, better society, better information, better transparency and better capital markets.

Why Policymakers Should Act​

The European institutions have identified the need to become active. In June 2017 the European Commission published non-binding guidelines to complement the non-financial disclosure Directive and help companies disclose environmental and social information. These guidelines are not binding and companies may decide to use international, European or national guidelines according to their own characteristics or business environment. They do not extend the scope of current rules in any way. Nor do they add undue administrative burden. Additionally, in March 2018 the European Commission launched a fitness check on public reporting by companies, which aims to assess whether the EU reporting framework (financial and non-financial reporting) is still fit for purpose. Amongst others, this initiative assesses whether the EU public reporting framework is fit for new challenges (sustainability, digitalisation). It is important that the policymakers pursue these activities with foresight. Organisations should be more involved in reporting. The question is not if it should be regulated, but rather when. Initiatives like the European Lab can also bring valuable insight to policymakers: it can give examples of corporate reporting being misused and should help to find best practices.


Directive 2014/95/EU, which elaborates on the disclosure of non-financial and diversity information by certain large undertakings and groups, which amends the Accounting Directive, applies to all public interest companies in the EU (banks and insurance companies are thus included), and to those companies who have more than 500 employees. The Directive is high level and is principles-based. It identifies four main topics: Environmental, Social and employee matters, respect for Human Rights, and anti-corruption and bribery matters. 

The European Commission Action Plan Financing Sustainable Growth requested the European Financial Reporting Advisory Group (EFRAG) in 2018 to establish a European Corporate Reporting Lab (European Lab). The objective of the European Lab is to stimulate innovations in the field of corporate reporting in Europe by identifying and sharing good practices. The European Lab deliverables are not intended to and do not have any authoritative or normative status. The European Lab will initially focus on non-financial reporting, including sustainability reporting. Preliminary projects may include climate-related disclosures in line with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures. Other topics may be environmental accounting and, in the medium term, integrated reporting, digitalisation and innovations in various other aspects of corporate reporting. The work of the European Lab is kept separate from EFRAG’s primary role related to International Financial Reporting Standards (IFRS). EFRAG not only has a close relationship with the European Commission, but the work that EFRAG is producing reaches the Parliament and European Supervisory Authorities (ESAs) as well (e.g. European Parliament resolution of 3 October 2018 on International Financial Reporting Standards: IFRS 17 Insurance Contracts, letter to the ESAs on the indorsement process of IFRS 17). 

In June 2019, the Commission also updated the non-binding guidelines on non-financial disclosure that accompany the Non-Financial Reporting Directive (Directive 2014/95/EU) in order to take into account the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). 


Benchmark Regulation (BMR)

As hinted at above, we would welcome the extension of the powers of the NCAs or ESMA, so that they can determine the replacement rate and also allow the use of non-compliant benchmarks in legacy contracts, particularly in those contracts that do not contain a specific fallback provision (silent contracts) or the applicable clause is either not appropriate or not workable.

Benchmark users should be allowed to continue using such benchmark in certain circumstances avoiding its automatic cessation, in order to ensure the continuity of the contracts using such benchmark as a reference. This provision could be established either for users of certain products or transactions that may prove impossible to modify (e.g. mortgage loans), or for a sufficient period of time which allows its replacement by another benchmark.

Identified Concerns

ESBG supports the Commission’s approach on a revision of the Benchmark Regulation (BMR). The main objective should be granting broader powers to competent authorities at national or European level to ensure an orderly cessation of a critical benchmark. These powers should include the mandate to continue granting the provision of a critical benchmark using a different methodology or a replacement rate. The introduction of those powers is crucial in order to avoid significant market disruption and extensive litigation and reduce legal risk. For legacy contracts, competent authorities should decide the replacement rate or the maintenance of the old IBOR rate. Without providing these measures, the IBOR transition process can result in a risk to financial stability, a major legal risk for financial entities due to contract frustration and, without doubt, could cause detriment to investors.

Why Policymakers Should Act​

​The BMR should grant customised powers to competent authorities to ensure the orderly transition from a critical benchmark to a replacement rate. ESBG is convinced that the public sector can play a role in helping the private sector to manage the risk associated with reference rate transition, in particular requiring a shift from one reference rate to another by law. We think that the problems of contract law can indeed be better compensated by a legal replacement.​


The European Commission proposed in September 2013 a draft regulation on indices used as benchmarks in financial instruments and financial contracts (the “Benchmarks Regulation” or “BMR)). The Regulation was published in the Official Journal on 29 June 2016, and applied as of 1 January 2018. It introduced a common framework to ensure the accuracy and integrity of indices used as benchmarks in financial instruments and financial contracts, or to measure the performance of investment funds in the Union. The Regulation provides that by January 2020, the Commission should review and submit a report to the European Parliament and to the Council on this Regulation and in particular on (a) the functioning and effectiveness of the critical benchmark, mandatory administration and mandatory contribution regime; (b) the effectiveness of the authorisation, registration and supervision regime of administrators and (c) the functioning and effectiveness of Article 19(2) (commodity benchmarks as critical benchmarks), in particular the scope of its application. The formal review process was meanwhile launched. The Commission published on 24 July 2020 a proposal for a regulation amending the EU Benchmarks Regulation. In this proposal the Commission would be able to designate a statutory replacement benchmark. ​