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Disclosure on NPEs: Undue costs would hit smallest institutions

Disclosure on NPEs: Undue costs would hit smallest institutions



ESBG says in ​EBA consultation response


>>See the full response



BRUSSELS, 31 July 2018 – ESBG replied on 27 July to the EBA consultation on disclosure by credit institutions of information on non-performing and forborne exposures. ESBG stressed that the proposed proportionality principle whereby institutions are divided between “significant” and “non-significant” is going to result in undue costs for the smallest institutions in the non-significant group. ESBG proposed to extend the proportionality threshold so that non-significant institutions with consolidated assets below €1.5 billion have less disclosure requirements, only consisting of the overall NPL-ratio and the nominal NPL and NPE amount.

Among other aspects in its response, ESBG highlighted that the proposed templates increase the reporting requirements on concepts that are already disclosed in compulsory reporting, such as FINREP. In this regard, ESBG suggested harmonising the different reporting frameworks in order to remove redundancies. 

As part of the CRR revision, the European Commission, together with the European Parliament and the European Council, recognised the need for relief for medium-sized and smaller institutions, in particular in the area of reporting and disclosure. ESBG noted in its response that it seems peculiar that, there is expected to be a significant reduction in disclosures for smaller/medium-sized institutions, but at the same time extensive new disclosure requirements are to be introduced.


>>See the full response




European Supervisory Authorities (EBA-ESMA); European Institutions; Capital Requirements Directive and Regulation