Changes from plenary report to adopted text

Removed(197) the following Article 494d is inserted:

Removed‘Article 494d Reversal from the IRB Approach to the Standardised Approach

RemovedBy way of derogation from Article 149, paragraphs 1, 2 and 3, an institution may from [OP: insert date of entry into force of this regulation] until 31 December 2027, revert to the Standardised Approach for one or more of the exposure classes provided for in Article 147(2), where all the following conditions are met:

Removed(a) the institution was already on [OP please insert date = one day before the date of entry into force of this amending Regulation] in existence and authorised by its competent authority to treat those exposure classes under the IRB Approach;

Removed(b) the institution requests a reversal to the Standardised Approach only once during the period set out in this Article;

Removed(c) the request to revert to the Standardised Approach is not made with a view to engage in regulatory arbitrage;

Removed(d) the institution has formally notified the competent authority that it wishes to revert to the Standardised Approach for those exposure classes at least six months before it effectively does revert to that approach;

Removed(e) the competent authority has not objected to the institution’s request to such reversal within three months from the reception of the notification referred to in point (d).’;

Removed(198) Article 495 is replaced by the following:

Removed‘Article 495 Treatment of equity exposures under the IRB Approach

Removed1. By way of derogation from Article 107(1)▌, institutions that have received the permission to apply the Internal Ratings Based Approach to calculate the risk weighted exposure amount for equity exposures shall, until 31 December 2029 and without prejudice to Article 495a(3), calculate the risk weighted exposure amount for each equity exposure for which they have received the permission to apply the Internal Ratings Based Approach as the higher of the following:

Removed(a) the risk weighted exposure amount calculated in accordance with Article 495a, paragraphs 1 and 2;

Removed(b) the risk weighted exposure amount calculated under this Regulation as it stood prior to [OP please insert the date = date of entry into force of this amending Regulation]

Removed2. Instead of applying the treatment laid down in paragraph 1, institutions that have received the permission to apply the Internal Ratings Based Approach to calculate the risk weighted exposure amount for equity exposures may alternatively choose to apply the treatment set out in Article 133 and the transitional arrangements in Article 495a to all of their equity exposures at any time until 31 December 2029.

RemovedFor the purposes of this paragraph, the conditions to revert to the use of less sophisticated approaches laid down in Article 149 shall not apply.

Removed3. Institutions applying the treatment laid down in paragraph 1 shall calculate EL in accordance with Article 158, paragraphs 7, 8 or 9, as applicable, as those paragraphs stood on ... [day before the date of entry into force of this Regulation].

RemovedExpected loss amounts calculated in accordance with Article 158(7), (8) or (9), as applicable, as those paragraphs stood on ... [day before the date of entry into force of this amending Regulation] shall be deducted from Common Equity Tier 1 items under Article 36(1), point (d).

Removed4. Where institutions request the permission to apply the IRB Approach to calculate the risk weighted exposure amount for equity exposures, competent authorities shall not grant such permission after [OP please insert the date = date of application of this Regulation].’;

Removed(199) the following Articles are inserted:

Removed‘Article 495a Transitional arrangements for equity exposures

Removed1. By way of derogation from the treatment laid down in Article 133(3), equity exposures shall be assigned the higher of the risk-weight applicable on ... [one day before the date of entry into force of this amending Regulation], capped at 250%, and the following risk-weights:

Removed(a) 100 % during the period from 1 January 2025 to 31 December 2025;

Removed(b) 130 % during the period from 1 January 2026 to 31 December 2026;

Removed(c) 160 % during the period from 1 January 2027 to 31 December 2027;

Removed(d) 190 % during the period from 1 January 2028 to 31 December 2028;

Removed(e) 220 % during the period from 1 January 2029 to 31 December 2029.

Removed2. By way of derogation from the treatment laid down in Article 133(4), equity exposures shall be assigned the higher of the risk weight applicable on [one day before the date of entry into force of this amending Regulation] and the following risk-weights:

Removed(a) 100 % during the period from 1 January 2025 to 31 December 2025;

Removed(b) 160 % during the period from 1 January 2026 to 31 December 2026;

Removed(c) 220 % during the period from 1 January 2027 to 31 December 2027;

Removed(d) 280 % during the period from 1 January 2028 to 31 December 2028;

Removed(e) 340 % during the period from 1 January 2029 to 31 December 2029.

Removed3. By way of derogation from Article 133, institutions may continue to assign the same risk weight that was applicable as of ... [OP please insert the date = one day before the date of entry into force of this amending Regulation] to equity exposures, including the part of the exposures not deducted from own funds in accordance with Article 471, to entities of which they have been a shareholder on [adoption date] for six consecutive years and over which they - or together with the network the institutions belong to - exercise significant influence or control in the meaning of Directive 2013/34/EU, or the accounting standards to which an institution is subject under Regulation (EC) No 1606/2002, or a similar relationship between any natural or legal person or network of institutions and an undertaking or where an institution is in the capacity to appoint at least one member of the management body of the entity.

Removed1. By way of derogation from Article 161(4), the LGD input floors applicable to specialised lending exposures treated under the IRB Approach where own estimates of LGDs are used, shall be the applicable LGD input floors provided for in Article 161(4), multiplied by the following factors:

Removed(a) 50 % during the period from 1 January 2025 to 31 December 2027;

Removed(b) 80 % during the period from 1 January 2028 to 31 December 2028;

Removed(c) 100 % during the period from 1 January 2029 to 31 December 2029.

Removed2. EBA shall prepare a report on the appropriate calibration of risk parameters, including the haircut parameter, applicable to specialised lending exposures under the IRB Approach, and in particular on own estimates of LGD and LGD input floors for each specific category of specialised lending as defined in Article 122a(3), points (a), (b) and (c). EBA shall in particular include in its report data on average numbers of defaults and realised losses observed in the Union for different samples of institutions with different business and risk profiles. EBA shall recommend specific calibrations of risk parameters, including the haircut parameter, that would reflect the specific and different risk profile of each of the aforementioned categories of specialised lending exposures.

RemovedEBA shall submit the report on its findings to the European Parliament, to the Council, and to the Commission, by 31 December 2025.

RemovedOn the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS, the Commission shall ▌, where appropriate submit to the European Parliament and to the Council a legislative proposal by 31 December 2027, ▌to extend the derogation referred to in paragraph 1 for four years at most.

Removed1. By way of derogation from Article 230, the applicable value of Hc corresponding to ‘other physical collateral’ for the exposures referred to in Article 199(7) where the asset leased corresponds to the ‘other physical collateral’ type of funded credit protection, shall be the value of Hc for ‘other physical collateral’ provided for in Article 230(2), Table 1, multiplied by the following factors:

Removed(a) 50 % during the period from 1 January 2025 to 31 December 2027;

Removed(b) 80 % during the period from 1 January 2028 to 31 December 2028;

Removed(c) 100 % during the period from 1 January 2029 to 31 December 2029.

Removed2. EBA shall prepare a report on the appropriate calibrations of risk parameters associated with leasing exposures under the IRB Approach, and of risk weights under the Standardised Approach, and in particular on the LGDs and Hc provided for in Article 230. EBA shall in particular include in its report data on average numbers of defaults and realised losses observed in the Union for exposures associated with different types of▌ properties leased and different types of institutions practicing leasing activities.

RemovedEBA shall submit the report on its finding to the European Parliament, to the Council, and to the Commission, by 30 June 2026.

RemovedOn the basis of that report, and taking into account the internationally agreed standards developed by the BCBS, the Commission shall▌, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2027, to extend the derogation referred to in paragraph 1 for four years at most.

Removed1. By way of derogation from Article 111(2), institutions shall calculate the exposure value of an off-balance sheet item in the form of unconditionally cancellable commitment by multiplying the percentage provided for in that Article by the following factors:

Removed(a) 0 % during the period from 1 January 2025 to 31 December 2029;

Removed(b) 25 % during the period from 1 January 2030 to 31 December 2030;

Removed(c) 50 % during the period from 1 January 2031 to 31 December 2031;

Removed(d) 75 % during the period from 1 January 2032 to 31 December 2032.

Removed2. EBA shall prepare a report to assess whether the derogation referred to in paragraph 1, point (a), should be extended beyond 31 December 2032 and detail, where necessary, the conditions under which that derogation should be maintained.

RemovedEBA shall submit the report on its finding to the European Parliament, to the Council, and to the Commission, by 31 December 2028.

RemovedOn the basis of that report and taking due account of the related internationally agreed standards developed by the BCBS and the financial stability impact of these measures, the Commission shall, where appropriate, submit to the European Parliament and to the Council a legislative proposal by 31 December 2031 to extend at most by four years the treatment referred to in paragraph 2 of this Article.’;

Removed(199a) Article 500 is amended as follows:

Removed(a) paragraph 1 is amended as follows:

Removed(i) point (b) is replaced by the following:

Removed‘(b) the dates of the disposals of defaulted exposures are after 23 November 2016 but not later than 31 December 2024.’;

Removed(ii) subparagraph 2, is replaced by the following: