EBA publishes risk guidelines paper
20 April 2018 London
Image: Shutterstock
The European Banking Association (EBA) has published a consultation paper setting out draft guidelines to financial institutions on the specification of types of exposures to be associated with high risk under Article 128(3) of Regulation (EU) No 575/2013.
This will affect minimum capital requirements. The EBA highlighted the investments in certain kinds of venture capital firms and/or private equity as being high risk.
Other high risk categories include the financing of speculative investments in both financial and non-financial assets (other than real estate) and any exposure for which an issue specific external rating is not available and which can be considered as specialised lending exposure.
The EBA explained that the issue is addressed by the guidelines is the lack of common institutions鈥� and supervisory practices regarding the types of exposures which are associated with particularly high risk and under which circumstances.
The policy objective of the guidelines is to establish convergence of institutions鈥� assessment of whether an exposure constitutes a particularly high risk in the sense of Article 128 (3) CRR.
The EBA has requested responses to the paper by 17 July 2018. It says that comments submitted after this deadline may not be processed.
This will affect minimum capital requirements. The EBA highlighted the investments in certain kinds of venture capital firms and/or private equity as being high risk.
Other high risk categories include the financing of speculative investments in both financial and non-financial assets (other than real estate) and any exposure for which an issue specific external rating is not available and which can be considered as specialised lending exposure.
The EBA explained that the issue is addressed by the guidelines is the lack of common institutions鈥� and supervisory practices regarding the types of exposures which are associated with particularly high risk and under which circumstances.
The policy objective of the guidelines is to establish convergence of institutions鈥� assessment of whether an exposure constitutes a particularly high risk in the sense of Article 128 (3) CRR.
The EBA has requested responses to the paper by 17 July 2018. It says that comments submitted after this deadline may not be processed.
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