The European Banking Authority has published a consultation paper on draft regulatory technical standards (RTS) on additional objective criteria for the application of a preferential treatment in the calculation of the liquidity coverage requirement (LCR), for cross-border intragroup liquidity flows under the Capital Requirements Regulation (CRR).
The draft RTS’ give further details on these additional objective criteria, which are contained in a Commission Delegated Regulation specifying the LCR for credit institutions. In particular, the draft RTS’ elaborate on the following aspects:
- the liquidity provider and receiver shall present a low liquidity risk profile;
- there are legally binding agreements and commitments between group entities regarding the credit or liquidity line; and
- the liquidity risk profile of the liquidity receiver has been adequately taken into account in the liquidity risk management of the liquidity provider.
The deadline for comments on the consultation paper is 13 January 2016.