The European Banking Authority (EBA) has published an Opinion to the European Commission supporting its proposed amendment to the draft regulatory technical standards (RTS) on additional collateral outflows with regard to the historical look-back approach (HLBA) calculation method. The amendment follows the Commission’s request to amend the draft RTS using the specifications provided by the Basel Committee on Banking Supervision (the Basel Committee).
The EBA has amended the draft RTS on additional collateral outflows to include the Basel Committee’s HLBA approach which had been clarified by way of FAQs in April 2014. The Basel Committee’s approach focuses on the largest net difference in collateral posted instead of the largest gross difference. In December 2015, the Commission raised concerns that the EBA’s HLBA approach could have a significant impact on credit institutions and international derivative markets and, therefore, decided not to adopt the draft RTS as submitted by the EBA, but signalled its willingness to endorse an amended version based on the Basel Committee’s HLBA approach.