The EBA consults on amendments to the operational risk Pillar 3 and supervisory reporting requirements to implement the Basel III reforms in the EU

• The EBA is seeking to implement the changes driven by the revised operational risk framework.
• The new data will allow supervisors and users of reporting and disclosure data to monitor institutions’ compliance with the Basel III framework for operational risk and will further foster consistent and enhanced supervision and market discipline.
• The alignment of the disclosure requirements with the Basel III framework and its integration with reporting will promote comparability and consistency of the information.

The European Banking Authority (EBA) today launched a public consultation on two draft Implementing Technical Standards (ITS) amending Pillar 3 disclosures and supervisory reporting requirements for operational risk. These consultations complement two additional consultation papers on Pillar 3 and supervisory reporting published on 14 December 2023, in line with the roadmap for the implementation of the EU Banking Package. The consultations run until 30 April 2024.

These amending ITS implement the new Capital Requirements Regulation (CRR3) reporting and disclosure requirements linked to the introduction of the revised framework for the calculation of own funds requirements for operational risk. The consultations are part of phase 1 in the implementation of the EU Banking Package, which also includes the two consultations published in December 2023 covering the disclosure and reporting requirements for output floor, credit risk (also IP Losses), credit valuation adjustment (CVA), market risk and leverage ratio. 

With these ITS, the EBA aims to bring under one single document both the reporting and disclosure requirements for operational risk and the broader Pillar 3 disclosures and supervisory reporting CRR3 changes (already under consultation) so as to provide certainty to banks as soon as possible. This also explains the shorter consultation period.

These consultation papers should be read in conjunction with the consultation papers on the new framework for the business indicator for operational risk, also published today.

Consultation process and next steps

Comments to both consultation papers can be sent to the EBA by clicking on the "send your comments" button on the consultation pages. Comments to the Pillar 3 disclosures and supervisory reporting are expected to be submitted separately. Please note that the deadline for the submission of comments is 30 April 2024. All received contributions will be published at the end of the consultations, unless requested otherwise.

A public hearing on the draft ITSs will take place via online meeting on 20 March 2024 from 10:00 to 13:00 CET. Please register for the hearing here entering the password Oprisk2024 by 18 March 16:00 CET. 

Following the consultation period, the two draft ITS will be finalised and they are expected to be submitted to the European Commission by end-June 2024.

Legal basis and background

Regulation (EU) No 575/2013 (‘the CRR’) mandates the EBA, in articles 434a and 430(7), to develop uniform disclosure and reporting requirements. These requirements are included respectively in the Commission Implementing Regulations (EU) 2021/637 and 2021/451. These ITS need to be updated whenever prudential or supervisory requirements change as is now the case with the CRR3/CRDVI. 

The forthcoming EU Banking Package will implement the latest Basel III reforms, which will strengthen the EU institutions’ prudential framework, including also the related new and amended reporting and disclosure requirements for institutions.

In developing these consultation papers, the EBA has tried to align the disclosure and reporting frameworks to facilitate institutions' compliance with both requirements. It has also done a mapping of the revised disclosure templates and the reporting templates. The disclosure requirements have been developed in line with the relevant Basel III standards to ensure comparability with internationally active banks.