BETA

Activities of Othmar KARAS related to 2021/0342(COD)

Shadow reports (1)

2023/02/10
Committee: ECON
Dossiers: 2021/0342(COD)
Documents: PDF(910 KB) DOC(341 KB)
Authors: [{'name': 'Jonás FERNÁNDEZ', 'mepid': 125046}]

Amendments (73)

Proposal for a regulation
Recital 2

(2) To address those problems, provide legal certainty and signal our commitment to our international partners in the G20, it is of utmost importance to implement the outstanding elements of the Basel III reform faithfully. At the same time, the implementation should ~~avoid a~~lead to no significant increase in overall capital requirements for the EU banking system on the whole and take ~~into~~due account of specificities of the EU economy, as stressed in the European Parliament resolution1a of 23 November 2016 on the finalisation of Basel III. Where possible, adjustments to the international standards should be applied on a transitional basis. The implementation should help avoid competitive disadvantages for EU institutions, in particular in the area of trading activities, where EU institutions directly compete with their international peers. Furthermore, the proposed approach should be coherent with the logic of the Banking Union and ~~avoid further fragmentation of~~harmonise the Single Market for banking. Finally, it should ensure proportionality of the rules and aim at further reducing compliance and reporting costs, in particular for smaller and non-complex institutions, without loosening the prudential standards~~. (See European Parliament resolution of 23 November 2016 on the finalisation of Basel III~~, in line with the EBA Cost of Compliance Study1b targeting a reduction of reporting costs of 10% to 20%. __________________ 1a P8_TA(2016)0439 1b EBA/Rep/2021/15 Or. en and EBA Study of the cost of compliance with supervisory reporting requirement EBA/Rep/2021/15.)

2022/08/11
Committee: ECON

Proposal for a regulation
Recital 5

(5) In order to ~~avoid fragmentation of~~harmonise the internal market for banking, the approach for the output floor should be coherent with the principle of risk aggregation across different entities within the same banking group and the logic of consolidated supervision. At the same time, the output floor should address risks stemming from internal models in both home and host Member States. The output floor should therefore be calculated at the highest level of consolidation in the Union, whereas ~~subsidiaries located in other Member States than the EU parent should calculate, on a sub-consolidated basis, their contribution to the output floor requirement of the entire banking group~~banks and competent authorities should ensure that the capitalisation of standalone entities is adequate, in accordance with SCO 10 of the Basel principles. Thatis approach should avoid unintended impacts and ensure a fair distribution of the additional capital required by the application of the output floor between group entities in home and host Member States according to their risk profileis not only in line with the objectives of the banking union, but also avoids complexities, administrative burden and adverse effects for risk management within banking groups.

2022/08/11
Committee: ECON

Proposal for a regulation
Recital 10

(10) Corporate lending in the Union is predominantly provided by institutions which use the internal ratings based (IRB) approaches for credit risk to calculate their capital requirements. With the implementation of the output floor, those institutions will also need to apply the SA- CR, which relies on credit assessments by external credit assessment institutions (‘ECAI’) to determine the credit quality of the corporate borrower. For this purpose institutions can use all eligible ECAI credit assessments. The mapping between external ratings and risk weights applicable to rated corporates should be more granular, to bring such mapping in line with the international standards on that matter.

2022/08/11
Committee: ECON

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. 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. 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

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 assets or activities substantially associated with environmental or social objectives would be justified from a risk-based perspective. However, only after the completion of this accelerated report and the ongoing climate stress tests would it be justified to potentially propose a dedicated prudential treatment for these exposures.

2022/08/11
Committee: ECON

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

(11 a) in Article 47c(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), fulfils 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 (02013R0575-20230628)

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 13

Regulation (EU) No 575/2013
Article 49 – paragraph 4 – subparagraph 2

~~The h~~Holdings in respect of which deduction iss are not made ~~in accordance with~~pursuant to paragraphs 2 or 3 shall qualify as exposures and shall be risk weighted at 100 %.;

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 19

(ii) the amount of consolidated Common Equity Tier 1 capital that relates to that subsidiary that is required on a consolidated basis to meet the sum of the requirement laid down in Article 92(1), point (a), the requirements referred to in Articles 458 and 459, the specific own funds requirements referred to in Article 104 of Directive 2013/36/EU and the combined buffer requirement defined in Article 128, point (6), of that Directive;, and upon the approval of the competent authority, the Common Equity Tier 1 capital of the subsidiary required at local level to avoid restrictions on dividend payments. Upon the approval of the competent authority, in case of third countries, it shall be measured based on local own funds requirements;

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 19

Regulation (EU) No 575/2013
Article 84 – paragraph 1 – subparagraph 1a (new)

By way of derogation from Article 84(1), point (a), the competent authority may allow institutions to subtract either of the amounts referred to in point (i) or (ii).

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 20

Regulation (EU) No 575/2013
Article 85 – paragraph 1 – point a – point ii

(ii) the amount of consolidated Tier 1 capital that relates to the subsidiary that is required on a consolidated basis to meet the sum of the requirement laid down in Article 92(1), point (b), the requirements referred to in Articles 458 and 459, the specific own funds requirements referred to in Article 104 of Directive 2013/36/EU and the combined buffer requirement defined in Article 128, point (6), of that Directive;, and upon the approval of the competent authority, the Common Equity Tier 1 capital of the subsidiary required at local level to avoid restrictions on dividend payments. Upon the approval of the competent authority, in case of third countries, it shall be measured based on local own funds requirements;

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 20

Regulation (EU) No 575/2013
Article 85 – paragraph 1 – subparagraph 1a

By way of derogation from Article 85(1), point (a), the competent authority may allow institutions to subtract either of the amounts referred to in point (i) or (ii).

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 20 a (new)

Regulation (EU) No 575/2013
Article 87 – paragraph 1 – point a – point ii

(20 a) in Article 87(1), point (a), point ii is replaced by the following: (ii) the amount of own funds that relates to the subsidiary that is required on a consolidated basis to meet the sum of the requirement laid down in point (c) of Article 92(1) of this Regulation, the requirements referred to in Articles 458 and 459 of this Regulation, the specific own funds requirements referred to in Article 104 of Directive 2013/36/EU, the combined buffer requirement defined in point (6) of Article 128 of that Directive, and any additional local supervisory own funds requirement in third countries; , and upon the approval of the competent authority, the Common Equity Tier 1 capital of the subsidiary required at local level to avoid restrictions on dividend payments. Upon the approval of the competent authority, in case of third countries, it shall be measured based on local own funds requirements; " Or. en (02013R0575-20220410)

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 20 b (new)

Regulation (EU) No 575/2013
Article 87 – paragraph 1 – subparagraph 1 a (new)

By way of derogation from Article 87(1), point (a), the competent authority may allow institutions to subtract either of the amounts referred to in point (i) or (ii). " Or. en (02013R0575-20220410)

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 23 – point a

Regulation (EU) No 575/2013
Article 92 – paragraph 3 – point b

(b) for the purposes set out in points (i) and (ii), the total risk exposure amount shall be calculated in accordance with paragraph 6: (i) institution in a Member State, for the purposes of complying with obligations of this Regulation on its individual basis; (ii) Member State, a parent financial holding company in a Member Statdeleted in case of a stand-alone subsidiary in case orf a parent ~~mixed financial holding company in a Member State, for the purposes of complying with obligations of this Regulation on the basis of its consolidated situation;~~institution in a

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 23 – point a

Regulation (EU) No 575/2013
Article 92 – paragraph 3 – point c

(c) for the purposes of complying with the obligations of this Regulation oin an ~~individual basis,~~ y case other t~~otal risk exposure amount of an institution which is neither a stand-alone institution in the EU nor a stand-alone subsidiary institution in a Member State~~han the cases referred to in point (a) of this paragraph, the total risk exposure amount shall be the un-floored total risk exposure amount calculated in accordance with paragraph 4.

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 23 – point b

Regulation (EU) No 575/2013
Article 92 – paragraph 6

6. The total risk exposure amount of an entity ‘i’ for the purposes set out in paragraph 3, point (b), shall be calculated as follows: null where: i = the index that denotes the entity; TREAi = the total risk exposure amount of entity i; U-TREAi = the un-floored total risk exposure amount of entity i calculated in accordance with paragraph 4; DIconso = any positive difference between the total risk exposure amount and the un-floored total risk exposure amount for the consolidated situation of the EU parent institution, EU parent financial holding company or EU parent mixed financial holding company of the group that entity i is part of, calculated as follows: null where: U-TREA = the un-floored total risk exposure amount calculated in accordance with paragraph 4 for that EU parent institution, EU parent financial holding company or EU parent mixed financial holding company on the basis of its consolidated situation; TREA = the total risk exposure amount calculated in accordance with paragraph 3, point (a), for that EU parent institution, EU parent financial holding company or EU parent mixed financial holding company on the basis of its consolidated situation. Contribconsoi = the contribution of entity i, calculated as follows: null where: j = the index that denotes all entities that are part of the same group as entity i for the consolidated situation of the EU parent institution, EU parent financial holding company or EU parent mixed financial holding company; U-TREAj = the un-floored total risk exposure amount calculated by entity j in accordance with paragraph 4 on the basis of its consolidated situation or, in case entity j is a stand-alone subsidiary institution in a Member State, on its individual basis; F-TREAj = the floored total risk exposure amount of entity j calculated on the basis of its consolidated situation as follows: null where: F-TREAj = the floored total risk exposure amount calculated by entity j on the basis of its consolidated situation or, in case entity j is a stand-alone subsidiary institution in a Member State, for its individual basis; S-TREAj = the standardised total risk exposure amount calculated in accordance with paragraph 5 by entity j on the basis of its consolidated situation or, in case entity j is a stand-alone subsidiary institution in a Member State, for its individual basis; x = 72,5 %.deleted

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 23 – point b

Regulation (EU) No 575/2013
Article 92 – paragraph 7a (new)

7 a. A parent institution in a Member State, a parent financial holding company in a Member State or a parent mixed financial holding company in a Member State shall ensure that capital is adequately distributed amongst legal entities of a banking group from a risk perspective. Competent authorities shall, on at least an annual basis, test that individual banks are adequately capitalised on a stand-alone basis.

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 39

Regulation (EU) No 575/2013
Article 121 – paragraph 1 – point a – point ii

(ii) the institution meets or exceeds the requirement laid down in Article 92(1), the requirements referred to in Articles 458(2)(d)(i), 458(2)(d)(vi) and 459(a), the specific own funds requirements referred to in Article 104a of Directive 2013/36/EU, the combined buffer requirement defined in Article 128, point (6), of Directive 2013/36/EU ~~and~~or any equivalent or additional local supervisory or regulatory requirements in third countries, insofar as those requirements are published and are to be met by Common Equity Tier 1 capital, Tier 1 capital or own funds, or where exposures to a financial institution shall be treated as exposures to an institution according to Article 119(5), any comparable prudential requirements corresponding to Grade A;

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 39

Regulation (EU) No 575/2013
Article 121 – paragraph 1 – point b – point ii

(ii) the institution meets or exceeds the requirement laid down in Article 92(1), the requirements referred to in Article~~s 458 and~~ 459(a), the specific own funds requirements referred to in Article 104a of Directive 2013/36/EU ~~and~~or any equivalent or additional local supervisory or regulatory requirements in third countries, insofar as those requirements are published and are to be met by Common Equity Tier 1 capital, Tier 1 capital ~~and own funds~~or own funds, or where exposures to a financial institution shall be treated as exposures to an institution according to Article 119(5), any comparable prudential requirements corresponding to Grade B;

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 41

Regulation (EU) No 575/2013
Article 122a – paragraph 3 – point a – point i – introductory part

(i) 860 % where the exposure is deemed to be high quality when taking into account all of the following criteria:

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 46

Regulation (EU) No 575/2013
Article 126 – paragraph 1 – subparagraph 1 a (new)

By way of derogation from point (a), institutions may assign a risk weight of 50 % to a non-IPRE exposure secured by a commercial property where the loss rates for such exposures published by the competent authority or by the EBA in accordance with Article 430a(3) do not exceed any of the following limits for losses aggregated across all such exposures existing in the previous year: (i) the losses on the part of the exposures up to 55 % of the property value do not exceed 0.3 % of the total amount of credit obligations outstanding in that year. (ii) the losses on the part of the exposures up to 100 % of the property value do not exceed 0.5 % of the total amount of credit obligations outstanding in that year.

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1- paragraph 1 – point 46

Regulation (EU) No 575/2013
Article 126 – paragraph 2 – subparagraph 1 – table 6c

Table 6c ETV50% ~~ETV60%~~ 50%ETV 60%ETV ETV80% ~~ETV80%~~ 60% 80% Risk weight 60% ~~70%~~ 70% 90% 110%

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 47

Regulation (EU) No 575/2013
Article 126a – paragraph 2 – introductory part

2. ADC exposures ~~to residential property, however,~~ may be risk weighted at 100 %, provided that, where applicable, the institution applies sound origination and monitoring standards which meet the requirements of Articles 74 and 79 of Directive 2013/36/EU and where at least one of the following conditions is met:

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 61 – point c

Regulation (EU) No 575/2013
Article 147 – paragraph 3 a

3a. Exposures to regional governments, local authorities or public sector entities shall ~~all~~ be assigned to the exposure class referred to in paragraph 2, point (a1), ~~irrespective of the treatment such exposures would receive under Articles 115 or 116~~given these exposures are treated according to Articles 115 or 116. In all other cases, exposures to regional governments, local authorities or public sector entities shall be assigned to the exposure class referred to in paragraph 2, point (a1).;

2022/08/11
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 63 – point a

Regulation (EU) No 575/2013
Article 150 – paragraph 1 – subparagraph 2

An institution that is permitted to use the IRB Approach for the calculation of risk- weighted exposure amounts and expected loss amounts for a given exposure class may, subject to the competent authority’s prior permission, apply the Standardised Approach for: (a) some types of exposures within that exposure class, including exposures from foreign branches and different product groups, where those types of exposures are immaterial in terms of size and perceived risk profile. ; (b) exposures to central governments and central banks of the Member States and their regional governments, local authorities, administrative bodies and public sector entities provided that (i) there is no difference in risk between the exposures to that central government and central bank and those other exposures because of specific public arrangements; and (ii) exposures to central governments and central banks are assigned a 0 % risk weight under Article 114(2) or (4); (c) exposures of an institution to a counterparty which is its parent undertaking, its subsidiary or a subsidiary of its parent undertaking provided that the counterparty is an institution or a financial holding company, mixed financial holding company, financial institution, asset management company or ancillary services undertaking subject to appropriate prudential requirements or an undertaking linked by a relationship within the meaning of Article 12(1) of Directive 83/349/EEC; (d) exposures between institutions which meet the requirements set out in Article 113(7); Or. en (See meaning of Article 12(1) of Directive 83/349/EEC)

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 63 – point a

Regulation (EU) No 575/2013
Article 150 – paragraph 1 – subparagraph 3

An institution that is permitted to use the IRB Approach for the calculation of risk- weighted exposure amounts for ~~only some types of exposures within an exposure class~~the exposures referred to in the second subparagraph, shall apply the Standardised Approach for the remaining types of exposures within that exposure class.;

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 71

Regulation (EU) No 575/2013
Article 160– paragraph 1 a (new

1a. For exposures assigned to the exposure class ‘regional and local authorities and to public sector entities (‘RGLA-PSE’)’, referred to in Article 147(2), point (a1), for the sole purposes of calculating risk weighted exposures and expected losses amounts of those exposures, the PD values used in the input of the risk weights and expected loss formulas shall not be less than the following value: 0,03 % (‘PD input floor’).

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 74 – point c

Regulation (EU) No 575/2013
Article 161 – paragraph 6 a (new)

6 a. For exposures assigned to the exposure class ‘exposures to regional and local authorities and to public sector entities (‘RGLA-PSE’), referred to in Article 147(2), point (a1), for the sole purpose of calculating risk weighted exposures and expected losses amounts of those exposures, where own LGD estimates are used, the LGD values used in input of the risk weight and expect loss formulas shall not be less than the following value: 5%.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 91 – point c a (new)

Regulation (EU) No 575/2013
Article 181 – paragraph 4 a (new)

4a. For the purpose of calculating loss in accordance with point 2 of Article 5 with regard to cases that return to non-default status, the EBA shall issue updated guidelines until 31 December 2025, in accordance with Article 16 of Regulation (EU) No 1093/2010, specifying how artificial cashflow should be treated, taking into account the principal, interest, fees, additional observed recoveries, additional drawings and costs. When developing the guidelines, the EBA shall assess the impact of discounting the balance at cure for cases hat return to non-default status, and consider the possibility of institutions only discounting the artificial cash flow over the actual period of default. Or. en (See updating of guidelines in Article 16 of Regulation (EU) No 1093/2010)

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 103 – point a – point i

Regulation (EU) No 575/2013
Article 208 – paragraph 3 – point b – subparagraph 1 a

The value of the property shall not exceed the average value measured for that property or for a comparable property over the last t~~hree~~wo years in case of commercial immovable property, and over the last ~~six~~four years in case of residential property. Modifications made to the property that improve the energy efficiency of the building or housing unit shall be considered as unequivocally increasing its value.; Or. <Original>{EN}en</Original>

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 103 – point b

Regulation (EU) No 575/2013
Article 208 – paragraph 3a – introductory part

3a. In accordance with paragraph 3 and subject to the approval of the competent authorities, institutions may carry out the valuation and revaluation of the property value by means of advanced statistical ~~or other mathematical~~ methods (‘models’), developed independently from the credit decision process, subject to the fulfilment of the following conditions:

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 103 – point b

Regulation (EU) No 575/2013
Article 208 – paragraph 3a – point f

(f) the estimates of models are independently validated and the validation process is generally consistent with the principles set out in Article 185, where applicable, and the independent valuer referred to in paragraph 3, point (b) is responsible for the final values used by the institution for the purposes of this Chapter.;

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 130 – point b a (new)

Regulation (EU) No 575/2013
Article 274 – paragraph 7 a (new)

(b a) the following paragraph is added: 7a. By way of derogation from paragraph 2, institutions may, upon approval of the competent authorities, replace alpha by 1 in the calculation of the exposure value for netting sets with non-financial counterparties as defined in point (9) of Article 2 of Regulation (EU) No 648/2012, or with non-financial counterparties established in a third country. Or. en (See Regulation (EU) No 648/2012 Article 2, point 9)

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 131

Regulation (EU) No 575/2013
Article 314 – paragraph 3a (new)

3 a. When calculating the SC, institutions may: (a) exclude fees collected in connection with the conclusion of a transaction giving access to contractual savings schemes leading to a mortgage loan with fixed interest rates and which fees’ are passed through to the sales force as acquisition costs immediately after they have been settled when considering the service component; (b) exclude any income received from or expenses paid to institutions, given they are members of the same institutional protection scheme meeting the requirements of Article 113(7).

2022/08/18
Committee: ECON

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

Regulation (EU) No 575/2013
Article 434 – paragraph 2

2. Large institutions and other institutions that are ~~not large institutions or small and non-complex institutions~~listed shall submit to EBA the disclosures referred to in Article 433a and Article 433c respectively, but not later than on the date of the publication of financial statements or financial reports for the corresponding period or as soon as possible thereafter. If disclosure is required to be made for a period when an institution does not prepare any financial report, the institution shall submit to EBA the information on disclosures as soon as practicable.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 189

Regulation (EU) No 575/2013
Article 449a – paragraph 2

The information referred to in the first paragraph shall be disclosed on ~~an annual basi~~ce every two years by small and non-complex institutions and on a ~~semi-~~annual basis by other institutions.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 3 – subparagraph 1

3. By way of derogation from Article 92(5)(a), point (i), parent institutions, parent financial holding companies or parent mixed financial holding companies, stand-alone institutions in the EU or stand- alone subsidiary institutions in Member States may~~, until 31 December2032,~~ assign a risk weight of 65 % to exposures to corporates for which no credit assessment by a nominated ECAI is available provided that that entity estimates the PD of those exposures, calculated in accordance with Part Three, Title II, Chapter 3, is no higher than 0,5 %.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 3 – subparagraph 2

EBA shall monitor the use of the ~~transitional~~ treatment laid down in the first subparagraph and, in close collaboration with ESMA, the availability of credit assessments by nominated ECAIs for exposures to corporates. EBA shall, in close collaboration with ESMA, report its findings to the Commission by 31 December 2028.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 3 – subparagraph 3

On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS and the specificities of the EU economy, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 4 – subparagraph 1

4. By way of derogation from Article 92(5)(a), point (iv), parent institutions, parent financial holding companies or parent mixed financial holding companies, stand-alone institutions in the EU or stand- alone subsidiary institutions in Member States shall~~, until 31 December 2029,~~ replace alpha by 1 in the calculation of the exposure value for the contracts listed in Annex II in accordance with the approaches set out in Part Three, Title II, Chapter 6, Sections 3 and 4, where the same exposure values are calculated in accordance with the approach set out in Part Three, Title II, Chapter 3, Section 6 for the purposes of the total un-floored risk exposure amount.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 4 – subparagraph 2

The Commission may, having taken into account the EBA report referred to in Article 514, adopt a delegated act in accordance with Article 462 to ~~permanently~~ modify the value of alpha, where appropriate.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 1 – introductory part

5. By way of derogation from Article 92(5)(a), point (i), ~~Member States may, allow~~ parent institutions, parent financial holding companies or parent mixed financial holding companies, stand-alone institutions in the EU or stand- alone subsidiary institutions in Member States tomay assign the following risk weights provided that all the conditions in the second subparagraph are met.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 1 – point a

(a) ~~until 31 December 2032,~~ a risk weight of 10 % to the part of the exposures secured by mortgages on residential property up to 55 % of the property value remaining after any senior or pari passu ranking liens not held by the institution have been deducted,

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 1 – point b

(b) ~~until 31 December 2029,~~ a risk weight of 45% to any remaining part of the exposures secured by mortgages on residential property up to 80 % of the property value remaining after any senior or pari passu ranking liens not held by the institution have been deducted, provided that the adjustment to own funds requirements for credit risk referred to in Article 501 is not applied.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 2 – point a

(a) the qualifying exposures are located in the ~~Member State that has exercised the discretion~~EU;

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 3 – introductory part

Where ~~the discretion referred to in the first subparagraph has been exercised and~~ all the associated conditions in the second subparagraph are met, institutions may assign ~~the following~~a risk weights of 60% to the remaining part of the exposures referred to in the second subparagraph, point (b)~~, until 31 December 2032:~~.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 3 – point a

~~(a) 52,5 % during the period from 1 January 2030 to 31 December 2030;~~deleted

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 3 – point b

~~(b) 60 % during the period from 1 January 2031 to 31 December 2031;~~deleted

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 3 – point c

~~(c) 67,5 % during the period from 1 January 2032 to 31 December 2032.~~deleted

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 4

~~When Member States exercise that discretion, they shall notify EBA and substantiate their decision.~~ Competent authorities shall notify the details of all the verifications referred to in the first subparagraph, point (c), to EBA.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 5

EBA shall monitor the use of the ~~transitional~~ treatment in the first subparagraph and report to the Commission by 31 December 20287 on the appropriateness of the associated risk weights.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 6

On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS and the specificities of the EU economy, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031.;

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 6

On the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS and the specificities of the EU economy, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031.;

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 196

Regulation (EU) No 575/2013
Article 465 – paragraph 5 – subparagraph 6 a (new)

EBA shall assess the appropriateness of adjusting risk weights for exposures secured by mortgages on commercial property, taking into account the appropriateness of risk weights for exposures secured by mortgages on residential property laid out in the first subparagraph and the relative differences in risk, and report to the Commission by 31 December 2027.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 197

Regulation (EU) No 575/2013
Article 494d – introductory part

By way of derogation from Article 149, paragraphs 1, 2 and 3, an institution may from ~~1 January 2025~~[OP please insert date = date of entry into force of this Regulation] until 31 December 2027, revert to the Standardised Approach for one or more of the exposure classes provided for in Article 147(2), where all the following conditions are met:

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 197

Regulation (EU) No 575/2013
Article 494d – point b

(b) the institution requests a reversal to the Standardised Approach only once during th~~at three year period~~e period set out in paragraph 1;

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 199

Regulation (EU) No 575/2013
Article 495a – paragraph 3

3. By way of derogation from Article 133, institutions may ~~continue to assign the same risk weight that was applicable as of~~assign a risk weight of 100% to equity exposures to entities of which they have been a shareholder at [OP please insert the date = ~~one day before~~2 years after the date of entry into force of this amending Regulation] ~~to equity exposures to entities of which they have been a shareholder at [adoption date]~~ for six consecutive years and over which they exercise significant influence in the meaning of Directive 2013/34/EU, or the accounting standards to which an institution is subject under Regulation (EC) No 1606/2002, or a similar relationship between any natural or legal person and an undertaking.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 199

Regulation (EU) No 575/2013
Article 495b – paragraph 2 – subparagraph 1

2. EBA shall prepare a report on the appropriate calibration of risk parameters applicable to specialised lending exposures under the IRB Approach, and in particular on own estimates of LGD and LGD input floors. EBA shall in particular include in its report data on average numbers of defaults and realised losses observed in the Union for different samples of institutions with different business and risk profiles and, if applicable, any significant Member State differences.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 199

Regulation (EU) No 575/2013
Article 495b – paragraph 2 – subparagraph 3

On the basis of that report~~, the Commission shall be empowered to amend this Regulation by adopting a delegated act, where appropriate, in accordance with Article 462~~ and taking due account of the related internationally agreed standards developed by the BCBS and the specificities of the EU economy, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027, to amend the treatment applicable to specialised lending exposures under Part Three, Title II.’;

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 199

Regulation (EU) No 575/2013
Article 495c – paragraph 1 – introductory part

1. By way of derogation from Article 230, the applicable value of Hc corresponding to ‘other physical collateral’ for the exposures referred to in Article 199(7) where the ~~property~~asset leased corresponds to the ‘other physical collateral’ type of funded credit protection, shall be the value of Hc for ‘other physical collateral’ provided for in Article 230(2), Table 1, multiplied by the following factors:

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 199

Regulation (EU) No 575/2013
Article 495c – paragraph 2 – subparagraph 1

2. EBA shall prepare a report on the appropriate calibrations of risk parameters associated with leasing exposures for different asset categories under the IRB Approach, and in particular on the LGDs and Hc provided for in Article 230 as well as appropriate calibrations of risk parameters associated with leasing exposures for different asset categories under the standard approach. EBA shall in particular include in its report data on average numbers of defaults and realised losses observed in the Union for exposures associated with different types of leased ~~propertie~~assets and different types of institutions practicing leasing activities.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 199

Regulation (EU) No 575/2013
Article 495c – paragraph 2 – subparagraph 2

EBA shall submit the report on its finding to the European Parliament, to the Council, and to the Commission, by 3~~0 June~~1 December 20265.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 199

Regulation (EU) No 575/2013
Article 495c – paragraph 2 – subparagraph 3

On the basis of that report, ~~the Commission shall be empowered to amend this Regulation by adopting a delegated act, where appropriate, in accordance with Article 462~~and taking due account of the related internationally agreed standards developed by the BCBS and the specificities of the EU economy, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027, to amend the treatment applicable to exposures arising from leasing under Part Three, Title II.’;

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 199

Regulation (EU) No 575/2013
Article 495d – paragraph 2 – subparagraph 1

2. EBA shall prepare a report to assess whether the derogation referred to in paragraph 1, point (a), should be extended, or recalibrated otherwise, beyond 31 December 2032 and, where necessary, the conditions under which that derogation should be maintained.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 199

Regulation (EU) No 575/2013
Article 495d – paragraph 2 – subparagraph 2

EBA shall submit the report on its finding to the European Parliament, to the Council, and to the Commission, by 31 December 20287.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 199

Regulation (EU) No 575/2013
Article 495d – paragraph 2 – subparagraph 3

On the basis of that report, and taking due account of the related internationally agreed standards developed by the BCBS, and the specificities of the EU economy the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 203129.’;

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 201 – point b a (new)

Regulation (EU) No 575/2013
Article 501a – paragraph 1 – point o

(b a) point o is replaced by the following: ‘(o) the obligor has carried out an assessment whether the assets being financed contribute to the ~~following~~ environmental objectives: (i) climate change mitigation; (ii) climate change adaptation; (iii) sustainable use and protection of water and marine resources; (iv) transition to a circular economy, waste prevention and recycling; (v) pollution prevention and control; (vi) protection of healthy ecosystems. (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02013R0575-20220410) set out in Article 9 of Regulation (EU) 2020/852.’ Or. en

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 202

Regulation (EU) No 575/2013
Article 501c – paragraph 2

EBA shall submit a report on its findings to the European Parliament, to the Council and to the Commission by 28 June 2023. On the basis of that report, the Commission shall, where appropriate, submit a legislative proposal to the European Parliament and to the Council.;

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 203

Regulation (EU) No 575/2013
Article 506 – paragraph 1

By 31 December 2026, EBA shall, in close collaboration with EIOPA, report to the Commission on the eligibility and use of policy insurance as credit risk mitigation techniques ~~and~~, on the appropriateness of the associated risk parameters referred to in Part Three, Title II, Chapter 3 and 4 and on the consistency of own funds requirements laid down in this Regulation.

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 204 a (new)

Regulation (EU) No 575/2013
Article 506ca (new)

(204 a)the following article is inserted as follows: ‘Article 506ca Prudential treatment of securitisation in relation to the output floor By 31 December 2025, EBA, in close collaboration with ESMA, shall report to the Commission on the impact of the output floor on the prudential treatment of securitisation, differentiating between different types of securitisation, including synthetic securitisation. Hereby, EBA may consider proposing a recalibration of non neutrality factors if significant risk transfers are observed. On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027.;’

2022/08/18
Committee: ECON

Proposal for a regulation
Article 1 – paragraph 1 – point 204 b (new)

Regulation (EU) No 575/2013
Article 506cb (new)

(204 b)the following article is inserted as follows: ‘Article 506cb Prudential treatment of securities financing transactions By 31 December 2025, EBA, in close collaboration with ESMA, shall report to the Commission on the impact of the new framework for securities financing transactions in terms of capital requirements. EBA shall assess whether a recalibration of the associated risk weights in the Standardised Approach is appropriate, given the associated risks with respect to short term maturities, specifically for residual maturities below one year. On the basis of that report, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027.’

2022/08/18
Committee: ECON

Proposal for a regulation
Annex – table – column 2 – row 8

Regulation (EU) No 575/2013
Annex 1

 Performance bonds, bid bonds, warranties and standby letters of credit related to particular transactions and warranties and standby letters of similar transaction-related contingent credit related to particular items; transactions and similar transaction- related contingent items, excluding trade finance off-balance sheet items referred to in bucket 4;

2022/08/18
Committee: ECON

Proposal for a regulation
Annex – table – column 2 – row 13 -a (new)

Regulation (EU) No 575/2013
Annex 1

 Trade finance off-balance sheet items including documentary credits in which underlying shipment acts as collateral and other self-liquidating transactions, warranties (including tender and performance bonds and associated advance payment and retention guarantees) and guarantees not having the character of credit substitutes and irrevocable standby letters of credit not having the character of credit substitutes;

2022/08/18
Committee: ECON