26 March 2013

EBA consults on draft implementing technical standards (ITS) on asset encumbrance reporting

These ITS, which will be part of the EU single rulebook, intend to develop reporting templates and instructions for asset encumbrance, with the ultimate aim of ensuring a harmonised measure of asset encumbrance across institutions. The consultation runs until 24 June, 2013.

The aim of these ITS is to provide supervisory authorities with the necessary information on the level of asset encumbrance in institutions in a standardised and harmonised framework. The reporting on asset encumbrance will complement the existing reporting framework, which has been previously consulted upon.

These ITS consist of three parts:

• A legal text which introduces the definition of asset encumbrance and outlines both the frequency and the proportionality criteria in the reporting;
• Reporting templates and instructions which, in the future, will be used for regulatory reporting on asset encumbrance;
• A data point model (DPM) and validation rules providing a structured representation of the requested data. The DPM contains all the relevant technical specifications necessary for developing an IT reporting format.

The asset encumbrance reporting will provide supervisory authorities with the necessary information on the level of asset encumbrance in institutions. This will provide a valuable input for a number of reasons. Firstly, it will allow a harmonised measure of asset encumbrance across institutions, which will allow supervisory authorities to compare the reliance on secured funding and the degree of structural subordination of unsecured creditors and depositors across institutions. Secondly, it will allow supervisors to assess the ability of institutions to handle funding stress, by providing an assessment of the ability of switching to secured funding. Thirdly, it can be incorporated into crisis management, as it will allow for an assessment of the assets available in a resolution situation.

Following the end of the consultation period, and to the extent that the final CRR text changes before the adoption of the ITS, the EBA will adapt the draft ITS accordingly to reflect any developments.

Comments can be sent to the EBA by 24 June, 2013.

Full news

Consultation paper

© EBA