On 20 June 2024, the European Banking Authority (EBA) published a speech by its chair, José Manuel Campa, entitled Strengthening bank capital standards in EU: the final phase of Basel III Implementation.

Key points in the speech include:

  • The EU Banking Package granted the EBA 140 mandates, primarily consisting of technical standards (60), guidelines (29) and reports and opinions (37). In addition, the EBA is tasked with the development of several operational products, such as the establishment, publication and maintenance of various lists and databases including the EBA Data Hub.
  • To provide clarity on how the EBA would develop the mandates implementing the legislation, it published in December 2023 a roadmap for delivering on Level 2.
  • In the area of supervisory reporting and Pillar 3 disclosures, the EBA is following a two-step sequential approach. Step 1 are those mandates and changes driven by the Capital Requirements Regulation III and Capital Requirements Directive VI necessary to implement and monitor Basel III requirements in the EU, including the updated Pillar 3 framework. In Step 2 the EBA will implement those reporting and disclosure requirements not linked to Basel III implementation, together with those requirements that depend on other Level 2 substance policy mandates with an extended development timeline. The consultation papers on both disclosures and reporting for Step 1 were published on 14 December 2023. Consultation papers covering crypto assets and operational risk were published in February 2024 as was a consultation on the policy work which namely covered a consultation on draft technical standards that specify the components and excluded items from the Business indicator, specify the mapping to supervisory reporting and considerations on mergers. The publication of the two final draft technical standards for Step 1 disclosure and reporting is expected in June/July 2024. It will cover all Step 1 relevant topics, including the transitional provisions for crypto assets exposures. The first disclosure reference date is foreseen to be 31 March 2025.
  • On 24 January 2024, the EBA published its heatmap following scrutiny of interest rate risk in the banking book standards implementation in the EU. Work undertaken so far highlights that there are some policy aspects that need further scrutiny, including proportionality aspects where relevant.
  • To reflect the growing importance of ESG risks, the EU Banking Package introduces several provisions aimed at accelerating the integration of ESG risks. Several mandates for the EBA are introduced, covering topics such as supervisory reporting, disclosures, stress testing, and the prudential treatment of exposures. Many of these mandates are included in the EBA roadmap on sustainable finance.
  • The EBA has so far published for consultation 19 of the 20 mandates under the Markets in Crypto Assets Regulation (as of March 2024), and consultations are now closed for 17 of those mandates. The final consultation paper, on the joint-European Supervisory Authorities’ guidelines on the classification of crypto-assets, will soon be published as well.
  • The EBA’s supervision function of issuers of significant asset-referenced and e-money tokens will be activated from Q4 2024.