The European Banking Authority (EBA) has published final guidelines on retail deposits subject to higher outflows for the purposes of liquidity reporting under the Capital Requirements Regulation (CRR).
The CRR is intended to implement the Basel III framework on liquidity in the EU. In particular, with a view to improving the short term resilience of the liquidity risk profile of institutions, Part 6 CRR introduces a liquidity coverage requirement and outlines a number of items subject to liquidity reporting. The liquidity coverage requirement will require institutions to hold liquid assets, the sum of the values of which covers the liquidity outflows less the liquidity inflows under stressed conditions. This is to ensure that institutions maintain levels of liquidity buffers which are adequate to face any possible imbalance between liquidity inflows and outflows under gravely stressed conditions over a period of 30 days. In accordance with article 460 CRR, the European Commission is expected to adopt a delegated act in 2014 to specify in detail the liquidity coverage requirement.
Under article 321(3) CRR, the EBA is required, taking into account the behaviour of local depositors as advised by Member State authorities, to issue guidelines by 1 January 2014 on the criteria to determine the conditions of application of paragraphs 1 and 2 of article 421 in relation to the identification of retail deposits subject to different outflows and the definitions of those products for the purposes of liquidity reporting. As required by article 421(3), the guidelines take account of the likelihood of these deposits to lead to outflows of liquidity during the next 30 days. These outflows are to be assessed under the assumption of a combined idiosyncratic and market-wide stress scenario.
Competent authorities must notify the EBA as to whether they comply or intend to comply with the guidelines, or otherwise provide reasons for non-compliance, by 6 February 2014.
View Guidelines on retail deposits subject to different outflows for the purposes of liquidity reporting, 6 December 2013
View Guidelines on retail deposits subject to different outflows for purposes of liquidity reporting under Regulation (EU) No 575/2013, on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Capital Requirements Regulation – CRR), 6 December 2013