EBA Statement on Supervisory Reporting and Pillar 3 disclosures in light of COVID-19

On 31 March 2020, the European Banking Authority (EBA) has issued a new statement on supervisory reporting and Pillar 3 disclosures in light of COVID-19. This statement provides further possible actions to be taken by institutions, Competent Authorities (CAs) and Resolution Authorities (RAs) to mitigate the impact of the COVID-19 outbreak on the EU banking sector.

The EBA considers that institutions need to concentrate their efforts on monitoring and assessing the impact of the COVID-19 outbreak as well as ensuring business continuity given that they may face increasingly difficult conditions in the immediate future. Concurrently, market participants, CAs and RAs require access to reliable information to understand institutions’ financial and prudential situations.

In relation to Supervisory Reporting, the EBA advises CAs and RAs to assess the extent to which a delayed submission of all the data or subsets of the data, included in the EBA reporting framework would be justified in these extraordinary circumstances and to consider, for now, such supervisory actions only for submissions due between March and end of May 2020.

In its statement, the EBA outlines that institutions should be allowed up to one (1) additional month for submitting the required data and that each CA and RA should make clear the precise terms for institutions in their jurisdiction. The EBA clarifies that the latter reporting extension should not apply to the reporting on the liquidity coverage ratio (LCR), additional monitoring metrics (ALMM), and reporting for resolution planning purposes. The EBA is also of the view that reporting in accordance with version 2.9 should not be postponed and should start as envisage with the first reference date being 31 March 2020.

The EBA suggests that CAs and RAs do not prioritise their supervisory actions towards ad-hoc data collections that are not specifically needed to monitor institutions in the context of COVID-19.

With regards to Pillar 3 disclosures, given the operational challenges that institutions may face from this situation to prepare Pillar 3 reports, the EBA specifies that CAs should make use of the flexibility that they may have when exercising the powers set in point (a) of Article 106 CRD and be flexible when assessing institutions’ compliance with the publication deadlines for their Pillar 3 reports. The EBA, however, highlights that when CAs exercise this flexibility, consideration should be given to the publication requirements of institutions with securities issuances traded in a regulated market.

Institutions anticipating a delay in the publication in their Pillar 3 reports are expected to inform their CAs and market participants of the delay, the reasons for such delay and to the extent possible the estimated publication date.

Finally, the EBA mentions in its statement that CAs and institutions should assess the need for additional Pillar 3 disclosures on prudential information that may be necessary to properly convey the risk profile of an institution in the context of COVID-19.