On 5 March 2020, the European Banking Authority (EBA) published a consultation to update the identification methodology of global systemically important institutions (G-SIIs) and related capital buffer rates.
The consultation follows the Basel Committee on Banking Supervision updating its approach to identify global systemically important banks in July 2018. The EBA methodology closely follows the approach of the Basel Committee and therefore the regulatory technical standards (RTS) on the identification methodology to identify G-SIIs is being updated.
In addition, the RTS are being updated in light of Article 131 of the Capital Requirements Directive V (CRD V) which requires the EBA to design an additional identification methodology for G‐SIIs based on the existing Basel international standard and on the cross‐border activity of the group excluding those between participating Member States.
Article 441 of the Capital Requirements Regulation II (CRR II) provides that institutions identified as G‐SIIs are required to disclose, on an annual basis, the values of the indicators used for determining their score in accordance with the identification methodology referred to in Article 131 of the CRD V. Article 434a of the CRR2 includes the mandate for the EBA to develop draft implementing technical standards (ITS) specifying uniform disclosure formats, and associated instructions in accordance with which the disclosures are to be made. The EBA is also consulting on draft ITS.
The deadline for comments on the EBA’s consultation is 5 June 2020.