Exposures subject to Covid-19 measures: reporting and disclosure

Reporting and Disclosing Exposures

Indeed, the need to address this gap stems from ensuring a deep understanding of financial institutions’ risk profile and the quality of assets on their balance sheets by both supervisors and the wider public.

In response to the Covid-19 pandemic, many governments have introduced measures such as legislative moratoria on loan repayments, with the aim to support the operational and liquidity obstacles faced by borrowers. Several EU Member States have also introduced public guarantee schemes on the origination of new loans and advances.

The existing supervisory reporting requirements being FINREP and Pillar 3 disclosures do not adequately capture information related to the measures developed in response to the Covid-19 crisis.

Therefore, the EBA has stressed the need for additional reporting and disclosures and published a set of guidelines to introduce additional time-limited supervisory reporting and disclosures necessary for monitoring the implementation of these exceptional measures, whilst not discarding the need for reasonable proportionality. These new templates cover a range of elements such as:

• F90.01 Overview of EBA-compliant moratoria (legislative and non-legislative: Reporting requirements on exposures subject to moratoria on repayments in accordance with paragraph 10 of EBA Guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the Covid-19 crisis
• F90.02 Overview of other Covid-19-related forbearance measures: Reporting requirements on exposures subject to Covid-19-related forbearance measures
• F90.03 Overview of newly originated loans and advances subject to public guarantee schemes in the context of the Covid-19 crisis: Reporting requirements on newly originated exposures that are subject to public guarantee schemes applied in response to the Covid-19 crisis
• Template 1: Information on loans and advances subject to legislative and non-legislative moratoria: Disclosure requirements on exposures subject to moratoria on repayments in accordance with paragraph 10 of EBA Guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the Covid-19 crisis
• Template 3: Information on newly originated loans and advances provided under newly applicable public guarantee schemes introduced in response to Covid-19 crisis: Disclosure requirements on newly originated exposures that are subject to public guarantee schemes applied in response to the Covid-19 crisis

The reporting requirements will be applicable on a quarterly basis, with the first reference date as of 30 June 2020 and remittance date as of 11 August 2020. The Authority has also clarified that this would prolong for an expected period of 18 months.

The disclosure requirements will apply semi-annually on 30 June and 31 December and will be applicable at an individual, sub-consolidated and consolidated level with regard to defined proportionality considerations.

To facilitate data collection and transmission, and to set out clearly what data is required, the EBA will provide accompanying data validation rules (Vrs), data point model (DPM) that will be used to generate an associated HBRL taxonomy. This technical package will be part of the version 2.10 Reporting Framework to be published in June 2020.

To conclude, the purpose of introducing these guidelines are premised upon the reliability of information which is essential for monitoring and assessing the risks associated with institutions’ activities. The aim is to strengthen transparency and market discipline amongst institutions within the EU banking sector during this unprecedented time.  

These guidelines will apply as soon as the translated versions in the EU languages are published.

References:

1. https://eba.europa.eu/eba-issues-guidelines-address-gaps-reporting-data-and-public-information-context-covid-19
2. https://eba.europa.eu/sites/default/documents/files/document_library/Publications/Guidelines/2020/884434/EBA%20GL%202020%2007%20Guidelines%20on%20Covid%20-19%20measures%20reporting%20and%20disclosure.pdf