The European Banking Authority (EBA) has published a consultation paper on guidelines on the criteria to determine the conditions of application of Article 131(3) of the CRD IV Directive in relation to the assessment of other systemically important institutions (O-SIIs).
Article 131 of the CRD IV Directive permits designated authorities to subject each firm identified as an O-SII to an O-SII buffer of up to 2% (calculated as common equity as a percentage of risk-weighted assets).
In the draft guidelines, the EBA sets out proposals for:
- a scoring methodology for the assessment of O-SIIs, including the weighting that authorities should apply to various indicators for each of the criteria;
- the supervisory assessment of O-SIIs; and
- disclosures and notifications relating to the O-SII identification process.
The deadline for responses is 18 October 2014. The EBA is required to publish the final version of the guidelines by 1 January 2015. Designated authorities are expected to implement the guidelines within six months of publication of the final version on the EBA website.
