On 20 February 2024, the European Banking Authority (EBA) published a consultation paper to consult on the draft implementing technical standards (ITS) amending Commission Implementing Regulation (EU) 2021/637 to implement the disclosure requirements coming from the introduction of the new regulatory framework for operational risk in the Capital Requirements Regulation (CRR) 3.

Background

The CRR 3 will implement the latest Basel III reforms, which will underpin a robust regulatory framework, efficient supervision and enhanced risk control by credit institutions. The CRR 3 introduces important changes related to the operational risk framework that have an impact on disclosure elements that will make the current disclosure templates and instructions out of date.

Draft ITS

The draft ITS amending Commission Implementing Regulation (EU) 2021/637 on public disclosures by institutions of the information on operational risk in accordance with Article 446 of the CRR aims at adapting the current disclosure templates and instructions to the CRR 3-related new requirements.

New regulatory requirements and impact on disclosure

The EBA has already published a consultation paper on draft ITS amending Commission Implementing Regulation 2021/637 on public disclosures by institutions of the information on output floor, credit risk, credit valuation adjustment (CVA) risk and market risk, to consult on the changes to the current Pillar 3 disclosure framework coming from the implementation of the latest Basel III reforms in the CRR 3, leaving out the disclosure requirements for operational risk that are consulted in this consultation paper. 

In view of the strong links between operational risk disclosure obligations and the policy and reporting mandates for operational risk, the EBA has decided to consult on the disclosure requirements for operational risk separately from the other Pillar 3 disclosure topics and simultaneously with public consultations on policy products and supervisory reporting requirements on operational risk. The EBA will bring together the disclosure requirements that are being separately consulted on in a common draft ITS for final publication and submission to the European Commission.

Alongside this consultation paper, the EBA is also publishing an updated version of mapping tool between the revised disclosure and reporting requirements on operational risk under consultation, to ensure consistency between the two frameworks.

Next steps

After a consultation period of 3 months, the EBA will incorporate the draft ITS on operational risk disclosure obligations into the final draft ITS on Pillar 3 disclosure requirements and submit them to the Commission for adoption. This should occur at the beginning of Q3 2024. The application date of these ITS will be 1 January 2025 and the first disclosure reference date will be 31 March 2025, in line with the date of application of the CRR 3.