Changes from report parliamentary committee draft to plenary report

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

Added2. 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.

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

AddedOn 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.

Added1. 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:

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

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

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

Added2. 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.

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

AddedOn 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.

Added1. 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:

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

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

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

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

Added2. 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.

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

AddedOn 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.’;

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

Added(a) paragraph 1 is amended as follows:

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

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

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

Added‘The adjustment referred to in the first subparagraph may only be carried out until 31 December 2024 and its effects may last for as long as the corresponding exposures are included in the institution's own LGD estimates.’;

Added(b) the following paragraph is added:

Added'2a. The Commission shall, by 31 December 2026, and every two years thereafter, assess if the level of defaulted exposures in the balance sheets of the institutions has increased significantly, or it expects a significant deterioration in the institutions’ asset quality, or if the degree of development of secondary markets for defaulted exposures is not adequate to ensure efficient disposals of defaulted exposures by institutions, also taking into consideration the regulatory developments on securitisation.

AddedThe Commission shall review the appropriateness of the derogation set out in paragraph 1 and it shall, where appropriate, adopt delegated acts in accordance with Article 462 to extend, reintroduce, or amend, as needed, the adjustment provided in this Article.';

Added(200) in Article 501(2), point (b) is replaced by the following:

Added‘(b) an SME shall have the meaning laid down in Article 5, point (8);’;

Added(201) Article 501a(1) is amended as follows:

Added(a) point (a) is replaced by the following:

Added‘(a) the exposure is assigned to the corporate exposure class referred to either in Article 112, point (g), or in Article 147(2), point (c), with the exclusion of exposures in default;’;

Added(b) point (f) is replaced by the following:

Added‘(f) the obligor’s refinancing risk ▌is low or adequately mitigated, taking into account any subsidies, grants or funding provided by one or more of the entities listed in paragraph 2, points (b)(i) and (b)(ii);’;

Added(ba) point (o) is replaced by the following:

Added‘(o) for exposures originated after ... [the date of publication of this Regulation], the obligor has carried out a positive assessment that the assets being financed contribute to one or more environmental objectives set out in Article 9 of Regulation (EU) 2020/852;’;

Added(202) Article 501c, is replaced by the following:

Added‘Article 501c Prudential treatment of exposures to environmental and/or social factors

AddedEBA, after consulting the ESRB, shall, on the basis of available data ▌ assess whether the dedicated prudential treatment of exposures related to assets or liabilities, subject to impacts from environmental and/or social factors should be adjusted. In particular, EBA shall assess:

Added(a) the availability and accessibility of reliable and consistent ESG data for each exposure class determined in accordance with Title II of Part III;

Added(b) the feasibility of introducing a classification system to identify and qualify the exposures, for each exposure class determined in accordance with Title II of Part III, based on a common set of principles to ESG risk classification, using the information on transition and physical risk indicators made available by sustainability disclosure reporting frameworks adopted in the Union and where available internationally, the guidance and conclusions coming from the supervisory stress-testing or scenario analysis of climate-related financial risks conducted by the EBA or the competent authorities and if appropriately reflecting the ESG risks, the relevant ESG score of the ECAI credit risks rating by a nominated ECAI;

Added(c) the effective riskiness of exposures related to assets and activities subject to impacts from environmental and/or social factors compared to the riskiness of other exposure;

Added(d) the potential short, medium and long-term effects of an adjusted dedicated prudential treatment of exposures related to assets and activities subject to impacts from environmental and/or social factors on financial stability and bank lending in the Union;

Added(e) the targeted enhancements that could be considered within the current prudential framework and the possible additional and more comprehensive revisions to the framework that should be considered, taking into consideration the developments agreed at international level by the Basel Committee.

AddedEBA shall submit a report on its findings to the European Parliament, to the Council and to the Commission by 31 December 2024.

AddedOn the basis of that report, the Commission shall, if appropriate, submit to the European Parliament and to the Council a legislative proposal within one year of the publication of the EBA report.’;

Added(203) Articles 505 and 506 are replaced by the following:

Added‘Article 505 Review of agricultural financing

AddedBy 31 December 2030, EBA shall report to the Commission on the impact of the requirements of this Regulation on agricultural financing including:

Added(a) the appropriateness of a dedicated risk weight for own funds requirements for credit risk calculated in accordance with Title II of Part III for exposures to an agricultural enterprise;

Added(b) if applicable, prudentially justified criteria for the application of a dedicated risk weight including farming practices as well as the inclusion of exposures in the corporate, retail or immovable property exposures class;

Added(c) the alignment with the “farm to fork” strategy and the respective environmental impact within the meaning of Regulation (EU) 2020/852, notably with the indicators as collected in the Union’s Farm Accountancy Data Network, showing contribution scores with regard to:

Added(i) net greenhouse gas emissions per hectare;

Added(ii) pesticides and fertilizers usage per hectare;

Added(iii) soil’s minerals efficiency ratios including carbon, ammonia, phosphate and nitrogen per hectare;

Added(iv) water use efficiency;

Added(v) a confirmation of positive impact on these four indicators with an EU-label for organic agriculture as meant in Council Regulation (EC) No 834/2007*.

AddedThe Commission shall submit a report thereon to the European Parliament and to the Council. Where appropriate, that report shall be accompanied by a legislative proposal to amend this Regulation in order to mitigate its negative effects on agricultural financing.

AddedBy 30 June 2024, EBA shall in close collaboration with EIOPA, report to the Commission on the eligibility and use of policy insurance as credit risk mitigation techniques including: