Changes from report parliamentary committee draft to plenary report

RemovedArticle 1 – paragraph 1 – point 187, Article 446 – paragraph 1 – point b: deleted

Added(ii) the institution meets or exceeds the requirement laid down in Article 92(1), the requirements referred to in Articles 458(2), point (d)(i), and Article 459, point (a), the specific own funds requirements referred to in Article 104a of Directive 2013/36/EU or any equivalent or additional local supervisory or regulatory requirements in third countries insofar as those requirements are published and are to be met by Common Equity Tier 1 capital, Tier 1 capital and own funds;

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Added(iii) information about the requirements referred to in point (ii) is publicly disclosed or otherwise made available;

RemovedArticle 1 – paragraph 1 – point 187, Article 446 – paragraph 1 – point d: (d) the business indicator, calculated in accordance with Article 314(1), and the amounts of each of the business indicator components and their sub-components for each of the three years relevant for the calculation of the business indicator;

Added(iv) the assessment performed in accordance with Article 79 of Directive 2013/36/EU has not revealed that the institution does not meet the conditions set out in points (i) and (ii).

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AddedFor the purposes of point (ii), equivalent or additional local supervisory or regulatory requirements shall not include capital buffers equivalent to those defined in Article 128 of Directive 2013/36/EU.

RemovedArticle 1 – paragraph 1 – point 187, Article 446 – paragraph 2 – point b: (b) the number and amounts of operational risk losses that were excluded from the calculation of the annual operational risk loss in accordance with Article 320(1), for each of the last ten years, and the corresponding justifications for that exclusion.;

Added(c) where the conditions for assignment to Grade A or Grade B are not met, or where any of the following conditions is met, exposures to institutions shall be assigned to Grade C:

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Added(i) the institution has material default risks and limited margins of safety;

RemovedArticle 1 – paragraph 1 – point 189, Article 449a – paragraph 1: Institutions shall disclose information on ESG risks, with a distinction between environmental, social and governance risks, and between physical risks and transition risks for environmental risks.

Added(ii) adverse business, financial, or economic conditions are very likely to lead, or have led, to the institution’s inability to meet its financial commitments;

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Added(iii) where audited financial statements are required by law for the institution, the external auditor has issued an adverse audit opinion or has expressed substantial doubt in its financial statements or audited reports within the previous 12 months about the institution’s ability to continue as a going concern institution.

RemovedArticle 1 – paragraph 1 – point 189, Article 449a – paragraph 3: EBA shall develop draft implementing technical standards specifying uniform disclosure formats for ESG risks, as laid down in Article 434a, ensuring that they are consistent with and uphold the principle of proportionality and that they avoid any duplication of existing legislative disclosure requirements. For small and non-complex institutions, the formats shall not require disclosure of information beyond the information required to be reported to competent authorities in accordance with Article 430(1), point (h).;

Added1a. For exposures to financial institutions treated as exposures to institutions in accordance with Article 119(5), for the purpose of assessing whether the conditions set out in paragraph 1, points (a)(ii) and (b)(ii), of this Article are met by those financial institutions, institutions shall assess whether those financial institutions meet or exceed any comparable prudential requirements.

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Added2. Exposures assigned to Grade A, B or C in accordance with paragraph 1 shall be assigned a risk weight as follows:

RemovedArticle 1 – paragraph 1 – point 192 – point a, Article 458 – paragraph 6: 6. Where Member States recognise the measures set in accordance with this Article, they shall notify the ESRB. The ESRB shall forward such notifications without delay to the Council, the Commission, the EBA, and the Member State authorised to apply the measures.

Added(a) exposures assigned to Grade A, B or C which meet any of the following conditions shall be assigned a risk weight for short-term exposures in accordance with Table 5:

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Added(i) the exposure has an original maturity of three months or less;

RemovedArticle 1 – paragraph 1 – point 192 – point b, Article 458 – paragraph 9: 9. Before the expiry of the authorisation issued in accordance with paragraphs 2 and 4, the Member State concerned shall, in consultation with the ESRB, the EBA and the Commission, review the situation and may adopt, in accordance with the procedure referred to in paragraphs 2 and 4, a new decision for the extension of the period of application of national measures for up to two additional years each time.

Added(ii) the exposure has an original maturity of six months or less and arises from the movement of goods across national borders.

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Added(b) exposures assigned to Grade A which are not short-term shall be assigned a risk weight of 30 % where all of the following conditions are met:

RemovedArticle 1 – paragraph 1 – point 193, Article 461a – paragraph 1: ‘The Commission shall monitor the implementation of the international standards on own funds requirements for market risk in third countries, including differences between the Union implementation and third countries’ implementation of those international standards, the impact of the rules in terms of own funds requirements and their entry into application. / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

Added(i) the exposure does not meet any of the conditions laid down in point (a);

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Added(ii) the institution’s Common Equity Tier 1 capital ratio is equal to or higher than 14 %;

RemovedArticle 1 – paragraph 1 – point 193, Article 461a – paragraph 1a (new): If relevant differences are observed, the Commission shall issue a report. On the basis of that report and taking into account 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 2031.

Added(iii) the institution’s leverage ratio is higher than 5 %.

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Added(c) exposures assigned to Grade A, B or C that do not meet the conditions in point (a) or (b) shall be assigned a risk weight in accordance with the Table 5.

RemovedArticle 1 – paragraph 1 – point 195 – point a, Article 462 – paragraph 2: 2. The power to adopt delegated acts referred to in Articles 244(6) and 245(6), in Articles 456 to 460 and in Article 461a shall be conferred on the Commission for an indeterminate period of time from 28 June 2013.

AddedWhere an exposure to an institution is not denominated in the domestic currency of the jurisdiction of incorporation of that institution, or where that institution has booked the credit obligation in a branch in a different jurisdiction and the exposure is not in the domestic currency of the jurisdiction in which the branch operates, the risk weight assigned in accordance with points (a), (b) or (c), as applicable, to exposures other than those with a maturity of one year or less stemming from self-liquidating, trade-related contingent items that arise from the movement of goods across national borders shall not be lower than the risk weight of an exposure to the central government of the country where the institution is incorporated.

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AddedTable 5

RemovedArticle 1 – paragraph 1 – point 195 – point a, Article 462 – paragraph 3: 3. The delegation of power referred to in Articles 244(6) and 245(6), in Articles 456 to 460 and in Article 461a may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of the delegated acts already in force.

Added’;

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Added(40) Article 122 is amended as follows:

RemovedArticle 1 – paragraph 1 – point 195 – point b, Article 462 – paragraph 6: 6. A delegated act adopted pursuant to Articles 244(6) and 245(6), Articles 456 to 460 and Article 461a shall enter into force only if no objection has been expressed by the European Parliament or the Council within a period of three months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or of the Council.;

Added(a) in paragraph 1, Table 6 is replaced by the following:

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Added‘Table 6

RemovedArticle 1 – paragraph 1 – point 196, Article 465 – paragraph 3 – subparagraph 1: 3. By way of derogation from Article 92(5)(a), point (i), parent institutions, parent financial holding companies or parent mixed financial holding companies, stand-alone institutions in the EU or stand-alone subsidiary institutions in Member States may, until 31 December2032, assign a risk weight of 65 % to exposures to corporates for which no credit assessment by a nominated ECAI is available provided that that entity estimates the PD of those exposures, calculated in accordance with Part Three, Title II, Chapter 3, is no higher than 0,5 % and, provided that the annual sales of that corporate does not exceed EUR 500 million.

Added’;

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Added(b) paragraph 2 is replaced by the following:

RemovedArticle 1 – paragraph 1 – point 196, Article 465 – paragraph 3 – subparagraph 2: deleted

Added‘Exposures for which such a credit assessment is not available shall be assigned a risk weight of 100 %.’;

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Added(41) the following Article 122a is inserted:

RemovedArticle 1 – paragraph 1 – point 196, Article 465 – paragraph 3 – subparagraph 3: deleted

Added‘Article 122a Specialised lending exposures

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Added1. Within the corporate exposure class laid down in Article 112, point (g), institutions shall separately identify as specialised lending exposures, exposures with all the following characteristics: