Key Regulatory Products
The EBA has issued the following regulatory documents:
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Regulatory Technical Standards (RTS) concerning the calculation and adjustment of the Business Indicator (BI), which aims to standardize the application of operational risk capital requirements.
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Implementing Technical Standards (ITS) on mapping to FINREP, ensuring consistency while reducing implementation, administrative, and operational costs.
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An amended ITS on operational risk reporting, aligning the supervisory reporting framework with updated regulatory demands.
These standards include updates to accounting practices, detailed breakdowns of operational risks, and additional clarifications for calculating financial components. The goal is to maintain a comprehensive and accurate representation of operational risk in bank financial statements.
Mergers, Acquisitions, and Disposals
Regarding institutional processes involving mergers or acquisitions, the final RTS requires the use of actual three-year historical data. For disposals, a set of conditions has been introduced to exclude BI items related to disposed entities. Additionally, a materiality threshold is defined for disposals, allowing institutions to make necessary adjustments without supervisory approval for minor disposals.
BI Mapping and Reporting Framework
The new standard components of the BI have been aligned with their respective FINREP reporting cells. This alignment has resulted in a final ITS document on BI mapping. Furthermore, the EBA’s final report on supervisory reporting focuses on improving operational risk own funds demands through more detailed assessments. It aims to provide supervisory authorities with essential data while considering the effort required from institutions to comply.
