The European Banking Authority (EBA) has published final draft regulatory technical standards (RTS) on additional collateral outflows.

Article 423(3) of the Capital Requirements Regulation (CRR) mandates the EBA to draft RTS in order to address the materiality and to determine the measurement of additional collateral outflows resulting from the impact of an adverse market scenario on institutions’ derivatives transactions, financing transactions and other contracts. Specifically, the RTS focus on the capture of adverse changes in market valuation of derivatives and similar transactions and contracts which contractually require collateral to be held in such cases.

The final ITS and RTS have been sent to the European Commission for their adoption as EU Regulations that will be applicable throughout the EU.

View EBA publishes final draft technical standards on additional outflows, 28 March 2014