[ParlTrack]

Joachim SCHUSTER, Csaba MOLNÁR, Niels FUGLSANG, René REPASI

Proposal for a regulation
Recital 11

(11) Most EU corporates, however, do not seek external credit ratings, in particular due to cost considerations. To avoid disruptive impacts on bank lending to unrated corporates and to provide enough time to establish public or private initiatives aimed at increasing the coverage of external credit ratings, it is necessary to provide for a transitional period for such increase in the coverage. During that transitional period, institutions using IRB approaches should be able to apply a favourable treatment when calculating their output floor for investment grade exposures to unrated corporates~~, whilst initiatives to foster widespread use of credit ratings should be established. Tha~~. In order to enhance competition in the market for credit tra~~nsitional arrangement should be coupled with a report prepared by the European Banking Authority (‘EBA’). After the transition period, institut~~ting agencies and support the development of an European market, the Commissions should be able to refer to credit assessments by ECAIs to calculate the capital requirements for most of their corporate exposures. To inform any future initiative on the set-up of public or private rating schemes, the European Supervisory Authorities (ESAs) should be requested to prepare a report on the impediments to the availability of external credit ratings by ECAIs, in particular for corporates, and on possible measures to address those impedimentfoster the availability of credit assessments by nominated ECAIs and assess how public and or private initiatives could be expanded and how oligopolies in the CRA market could be addressed, and where appropriate, submit to European Parliament and to the Council additional legislative proposals. The Commission should also assess the possibility of the creation of a European public credit rating agency as an impartial and trusted alternative to existing agencies. After the transition period, institutions should be able to refer to credit assessments by ECAIs to calculate the capital requirements for most of their corporate exposures. In the meanwhile, the European Commission stands ready to provide technical support to Member States via its Technical Support Instrument in this area, e.g. to formulate strategies on increasing the rating-penetration of their unlisted corporates or to explore best practices on setting up entities capable of providing ratings or providing related guidance to corporates.

2022/08/11
Committee: ECON

Paul TANG, René REPASI

Proposal for a regulation
Recital 11

(11) Most EU corporates, however, do not seek external credit ratings, in particular due to cost considerations. To avoid disruptive impacts on bank lending to unrated corporates and to provide enough time to establish public or private initiatives aimed at increasing the coverage of external credit ratings, it is necessary to provide for a transitional period for such increase in the coverage. During that transitional period, institutions using IRB approaches should be able to apply a favourable treatment when calculating their output floor for investment grade exposures to unrated corporates, whilst initiatives to foster widespread use of credit ratings should be established. ~~That transitional arrangement should be coupled with a report prepared by the European Banking Authority (‘EBA’).~~ After the transition period, institutions should be able to refer to credit assessments by ECAIs to calculate the capital requirements for most of their corporate exposures. To inform any future initiative on the set-up of public or private rating schemes, the European Supervisory Authorities (ESAs) should be requested to prepare a report on the impediments to the availability of external credit ratings by ECAIs, in particular for corporates, and on possible measures to address those impediments. In the meanwhile, the European Commission stands ready to provide technical support to Member States via its Technical Support Instrument in this area, e.g. to formulate strategies on increasing the rating- penetration of their unlisted corporates or to explore best practices on setting up entities capable of providing ratings or providing related guidance to corporates. The transition period should not be prolonged or extended indefinitely.

2022/08/11
Committee: ECON

Paul TANG, René REPASI

Proposal for a regulation
Recital 15

(15) To ensure that the impacts of the output floor on low-risk residential mortgage lending by institutions using IRB approaches are spread over a sufficiently long period and thus avoid disruptions to that type of lending that could be caused by sudden increases in own funds requirements, it is necessary to provide for a specific transitional arrangement. For the duration of the arrangement, when calculating the output floor, IRB institutions should be able to apply a lower risk weight to the part of their residential mortgage exposures that is considered secured by residential property under the revised SA-CR and that fulfil the EU's climate ambitions. To ensure that the transitional arrangement is available only to low-risk mortgage exposures, appropriate eligibility criteria, based on established concepts used under the SA- CR should be set. To determine whether residential property fulfil the EU's climate ambitions, Regulation (EU) 2019/852 and its Delegation Regulation (EU) 2021/2139, specifically chapter 7 of Annex I and chapter 7 of Annex II of that Delegated Regulation, should be usetd. The compliance with those criteria should be verified by competent authorities. Because residential real estate markets may differ from one Member States to another, the decision on whether to activate the transitional arrangement should be left to individual Member States. ~~The use of the transitional arrangement should be monitored by EBA.~~

2022/08/11
Committee: ECON

Paul TANG, René REPASI, Csaba MOLNÁR

Proposal for a regulation
Recital 41

(41) As the transition of the Union economy towards a sustainable economic model is gaining momentum, sustainability risks become more prominent and will potentially require further consideration. It is therefore necessary ~~to bring forward by 2 years EBA’s mandate to assess and report on whether a dedicated prudential treatment of exposures related to~~for banks to apply the large exposure regime as stipulated in Part Four of this Regulation to any financed emissions that are above an institution's target for financed emissions as sets o~~r activities substantially associated with environmental or social objectives would be justif~~ut in its plan to limit transition risks as stipulated by Article 76 of Directive 2013/36/EU. To allow for annual variations in the financed emissions of an institution, a 5% leeway shall be applied.

2022/08/11
Committee: ECON

Paul TANG, René REPASI

Proposal for a regulation
Recital 41 a (new)

(41 a) To ensure that any adjustments for exposures to small and medium-sized enterprises and for infrastructure do not undermine the EU's climate ambitions, departure from the risk-based approach of the banking framework should only take place when such exposures contribute to the EU's climate ambitions as set out in Regulation (EU) 2019/852.

2022/08/11
Committee: ECON

Paul TANG, René REPASI, Csaba MOLNÁR, Eva KAILI

Proposal for a regulation
Article 1 – paragraph 1 – point 11 a (new)

Regulation (EU) No 575/2013
Article 47c – paragraph 4 – point b

(11 a) in Article 47(4), point (b) is amended as follows: (b) 1 for the secured part of the non- performing exposure to be applied as of the first day of the eighth year following its classification as non-performing. , unless the guarantee or insurance has been invoked by the institution and the eligible protection provider has assumed and, in line with article 213(1), fulfills all payment obligations of the obliger towards the institution in full and in accordance with the applicable payment schedule, in which case a factor of 0 for the secured part of the non-performing exposure will apply. " Or. en (Regulation (EU) 575/2013)

2022/08/11
Committee: ECON

Joachim SCHUSTER, René REPASI

Proposal for a regulation
Article 1 – paragraph 1 – point 180 a (new)

Regulation (EU) No 575/2013
Article 433b – paragraph 2

2. (180 a)in Article 433b, paragraph 2 is replaced by the following: "By way of derogation from paragraph 1 of this Article, small and non-complex institutions that are non-listed institutions shall only be required to disclose the key metrics referred to in ~~Article 447 on an annual basis. (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:02013R0575-~~paragraph 2 of Article 447. Small and non-complex institutions that are non-listed institutions shall disclose the key metrics referred to in paragraph 2 of Article 447 on an annual basis. " Or. en 20220410&from=EN)

2022/08/18
Committee: ECON

Joachim SCHUSTER, René REPASI

Proposal for a regulation
Article 1 – paragraph 1 – point 182

Regulation (EU) No 575/2013
Article 434 – paragraph 3

3. EBA shall publish on its website the disclosures of small and non-complex institutions on the basis of the information reported by those institutions to competent authorities in accordance with Article 430. and paragraph 2 of Article 447.

2022/08/18
Committee: ECON

Joachim SCHUSTER, René REPASI

Proposal for a regulation
Article 1 – paragraph 1 – point 188 – point d a (new)

Regulation (EU) No 575/2013
Article 447 – paragraph1 a (new)

x (da) the following paragraph is added: "(1a) Small and non-complex institutions that are non-listed institutions shall only disclose the following key metrics in a tabular format: (a) the composition of their own funds and their risk-based capital ratios as calculated in accordance with Article 92(2); (b) the total risk exposure amounts as calculated in accordance with Article 92(3) and, where applicable; (c) where applicable, the amount and composition of additional own funds which the institutions are required to hold in accordance with point (a) of Article104(1) of Directive 2013/36/EU; (d) the combined buffer requirement which the institutions are required to hold in accordance with Chapter 4 of Title VII of Directive 2013/36/EU; (e) their leverage ratio as calculated in accordance with Article 429; (f) the average or averages, as applicable, of their liquidity coverage ratio based on end-of-the-month observations over the preceding 12 months for each quarter of the relevant disclosure period as calculated in accordance with the delegated act referred to in Article 460(1); (g) the net stable funding ratio at the end of each quarter of the relevant disclosure period as calculated in accordance with Title IV of Part Six. " Or. en (https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:02013R0575- 20220410&from=EN)

2022/08/18
Committee: ECON

Paul TANG, René REPASI