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EBA Seeks to Reduce Reporting Costs for Financial Firms

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The European Banking Authority (EBA) is exploring ways to streamline supervisory reporting requirements and reduce reporting costs for financial institutions, especially smaller ones, as part of its drive to create a more “proportionate” regulatory and supervisory framework.

Common supervisory reporting was first introduced in the EU back in 2013, and the EBA is mandated by Article 430(8) of the EU’s Capital Requirements Regulation (CRR) to measure the costs institutions incur when complying with the reporting requirements set out in its Implementing Technical Standards (ITS) on supervisory reporting. The bank is also required to assess whether these reporting costs are proportionate with regard to the benefits delivered for the purposes of prudential supervision and make recommendations on how to reduce the reporting cost at least for small and non-complex institutions.

To this end, the EBA this week has launched a new survey addressed to all European banks, calling for case studies to collect evidence on reporting costs as well as industry views on ways to reduce such costs and make the supervisory reporting more efficient.

The findings from this analysis should be formulated in a report and delivered to the European Commission and European Parliament in 2021. The cost of compliance study will focuses first, on understanding the actual reporting costs incurred by institutions in relation to supervisory reporting, and in particular in relation to the EBA ITS; second, on assessing the effects of a reduction of some specific reporting requirements on costs and supervisory effectiveness; and third, on assessing whether the reporting costs are proportionate with regard to the benefits delivered.

The deadline for questionnaire responses and case study submission is October 2020 – with responses to the qualitative questions expected by 1 October 2020, and responses to the quantitative questions as well as the submission of case studies are expected by 31 October 2020.

The final report, expected to be delivered to the European Commission and European Parliament in 2021, will contain recommendations on how to reduce reporting costs for the banking industry by looking at both technological improvements and reducing some reporting requirements.

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