On 16 July 2019, the European Banking Authority (EBA) published a report setting out its final draft implementing technical standards (ITS) amending Commission Implementing Regulation (EU) 680/2014 on supervisory reporting of institutions with regard to financial reporting (FINREP).
The amendments in the draft ITS address the risks of high non-performing exposures (NPE) and forborne exposures which the EBA defines as one of the key priorities for supervisors in assessing institutions’ strategies on the management of non-performing loans and advances (NPLs), and the overall effectiveness of these strategies. The proposed changes aim to strengthen supervisors’ ability to assess and monitor such exposures by collecting more granular information on a recurring basis to close identified data gaps.
Furthermore, the amendments in the draft ITS also concern the reporting of profit or loss (P&L) items by proposing to improve insights into operating and administrative expenses. The information obtained from fee and commission income and expenses has been revised to reflect sources of income and expenses that have so far been unrepresented. Additionally, minor changes have been made due to International Financial Reporting Standards 16 Leases replacing International Accounting Standards 17 as the new standard for the accounting of leases, since 1 January 2019.
In terms of next steps, the final draft ITS will be merged with the final draft ITS on common reporting (CONREP), and will then be submitted to the European Commission for endorsement before being published in the Official Journal of the EU. The technical standards will apply from 1 June 2020.