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The Commission requested further technical advice on eight national discretions and on an additional group of national discretions relating to real estate, ‘where more granularity, criteria or impacts is needed, should those options be removed or transformed into a general rule’.
Given the short time available to develop the advice CEBS was not able conduct a public consultation and an impact assessment on its proposals.
CEBS proposes to include additional criteria in the respective provisions in the Capital Requirements Directive on the national discretions on the treatment of high-risk items and on the recognition of other physical collateral. National discretions on the recognition of other unfunded credit protection for dilution risk and on the recognition of receivables as collateral should be kept.
CESR notes that further work should be conducted on the remaining discretions for which further technical advice was sought, i.e.:
Ø on the adequate percentages to calculate potential future credit exposures,
Ø on guidance to harmonise the treatment of entities as ‘public sector entities’,
Ø on the appropriate treatment of covered bonds,
Ø on prudence of the treatment of real estate as collateral and
Ø on guidance to harmonise the treatment of eligible ‘short-term exposures’.
Second advice on options and national discretions