EBA launches discussion on the impact on the volatility of own funds

17 February 2014

EBA published a discussion paper on the impact on the volatility of own funds of the revised IAS for employee benefits (IAS 19), and the deduction of defined benefit pension assets from own funds in accordance with the CRR. Deadline for comments is 14 April, 2014.

This discussion paper gives the EBA's preliminary views based on:

• a qualitative analysis of the accounting and prudential changes and their impact on the volatility of own funds,
• a quantitative analysis of this impact for a sample of EU institutions and
• a qualitative analysis of the factors that may impact the volatility of own funds in the future.

The discussion paper aims at gathering the stakeholders' input on this topic at an early stage of the process. Following the outcome of this consultation, the EBA will deliver its report to the Commission by 30 June, 2014.

Comments can be sent to the EBA by 14 April, 2014.

The proposed discussion paper has been developed on the basis of Article 519 of Regulation (EU) No 575/2013 (Capital Requirements Regulation - CRR), where the EBA is mandated to prepare a report on the impact the revised IAS 19 and the deduction of net pension assets are likely to have on the volatility of institutions' own funds. Taking into account the EBA report, the Commission shall prepare by 31 December 2014 a report for the European Parliament and the Council on this issue and, if need be, put forward a legislative proposal to introduce a treatment to adjust defined net benefit pension fund assets or liabilities for the calculation of own funds.

Press release

Discussion Paper

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