EBA calls for improvements to decision-making framework for supervisory reporting requirements

The European Banking Authority (EBA) issued today an Opinion to the European Parliament, Council and Commission proposing that the decision-making framework for adopting supervisory reporting requirements be made more efficient and fit-for-purpose by replacing the Commission’s Implementing Technical Standards (ITS) with decisions adopted directly by the EBA.

The current endorsement process of ITS on supervisory reporting poses challenges for financial institutions and supervisors alike due to systemic and significant delays in the adoption process, which disrupt the ability to update reporting requirements on a predictable schedule. Such delays often create mismatches between reporting requirements and the underlying obligations to which they relate. Consequently, they result in the EBA not being able to develop its risk analyses based on reliable data; competent authorities not having the necessary tools to supervise institutions appropriately; and financial institutions being disproportionately burdened with duplication of reporting requirements.

To improve the decision making process, in its Opinion, the EBA proposes that supervisory reporting requirements are adopted directly through its own implementing technical decisions, rather than via ITS.  The Opinion also proposes that full EU institutional and stakeholder accountability is maintained through mechanisms including consultation and cost-benefit analysis, a streamlined scrutiny right for the Commission, a regular report on the reporting compliance burden, and the possibility of extending the scope of the Board of Appeal review to cover such decisions.

Legal basis

This Opinion was in accordance with Articles 30(3)(a) and 34(1) of the EBA founding Regulation, which together enable the Authority to issue opinions as a follow up of findings of its peer reviews that show that a legislative initiative is necessary to ensure harmonisation, and given that supervisory reporting is among the EBA’s areas of its competence.

The Opinion also builds on the results of the EBA’s Peer Review on ITS establishing supervisory reporting requirements in the EU, which concluded that a legislative initiative to improve the decision-making framework for supervisory reporting requirements is necessary.

The EBA statement is available here.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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