The EBA consults on the amendments to the Pillar 3 disclosure and supervisory reporting frameworks in the context of the implementation of the Basel III reforms in the EU

EBA has initiated a public consultation on two sets of draft ITS amending Pillar 3 disclosures and supervisory reporting frameworks. These changes are part of the implementation of the Banking Package (CRR 3 and CRD 6) and are aligned with the Basel III reforms in the EU (please see EventID#24579). The amendments focus on areas such as output floor, credit risk, immovable property losses, capital valuation adjustment, market risk, and leverage ratio.

The draft ITS (EBA/CP/2023/38) amending ITS 2021/637 on public disclosures by institutions under CRR. The amendments are in response to the latest Basel III reforms, particularly those introduced by the political agreement reached in June 2023 on the banking package. The CP outlines a two-step approach to prioritize changes related to Basel III implementation in the EU. In this step 1, the focus is on amendments to the Pillar 3 disclosure framework, covering output floor, credit risk, market risk, and credit valuation adjustment. Operational risk reporting is not included in this CP but will be addressed separately in 2024. The EBA aims to submit the final draft ITS to the EU Commission in Q3 2024, with an application date of 1 January 2025, to align with the banking package’s implementation date.

The draft ITS (EBA/CP/2023/39) amending the ITS on supervisory reporting by institutions under CRR concerning output floor, credit risk, market risk, and leverage ratio. The EBA supervisory reporting framework assists in regulating and supervising credit institutions, ensuring consistency across authorities and facilitating risk assessment. With the recent political agreement on the banking package, implementing Basel III reforms, the CP addresses changes to the reporting framework, including output floor, credit risk, market risk, and leverage ratio. Operational risk reporting is not covered in this CP but will be consulted separately in 2024. The EBA plans a two-step process for reporting requirements, prioritizing Basel III-related changes first. The CP is part of the EBA’s roadmap on strengthening the prudential framework, aligning with the banking package’s application date of 1 January 2025. The final draft ITS is expected to be submitted to the EC in Q3 2024, with an application date of 1 January 2025 and the first reference date on 31 March 2025.
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EBA aims to provide clarity and support to banks in fulfilling their reporting and disclosure obligations related to Basel III reforms. The consultation papers, released ahead of the application date, seek feedback until 14 March 2024.
The draft ITS aim to ensure data availability for supervisors and users of Pillar 3 information, promoting consistent supervision and market discipline. The EBA emphasizes alignment and integration between disclosure and reporting frameworks for better compliance by institutions. The consultation process includes a public hearing on 23 January 2024, and after the consultation period, the finalized draft ITS are expected to be submitted to the EC by June 2023. The application date for these ITS is set for 1 January 2025, with the first disclosure reference date on 31 March 2025.