EBA publishes cost of compliance report

2021/06/07

The European Banking Authority (EBA) finalised its comprehensive study of the cost of compliance of European Economic Area (EEA) banks with supervisory reporting requirements. In its summary report, the EBA makes 25 recommendations which could lead cumulatively to savings of up to 15-24%. Most of the recommendations will be incorporated in the EBA work programme and implemented by the EBA as part of its ongoing policy work on developing and enhancing the common EU supervisory reporting framework. The recommendations, which focus primarily on small and non-complex institutions, address four broad areas:

• changes to the development process for the EBA reporting framework;
• changes to the design of EBA supervisory reporting requirements and reporting content;
• coordination and integration of data requests and reporting requirements; and
• changes to the reporting process, including the wider use of technology.

The study also identified the need to remove barriers to the wider adoption by institutions of FinTech and RegTech solutions as well as to promote better digitalisation of the institutions’ internal documents and contracts. As part of the recommendations, the EBA also considered streamlining liquidity reporting (additional liquidity monitoring metrics - ALMM) and exempting small and non-complex institutions from reporting certain templates, introducing changes to reporting large exposures, leverage ratio, and net stable funding ratio (NSFR), improving and further simplifying the reporting on asset encumbrance, better signposting of the regulatory and reporting requirements, introducing better articulation, explanation and providing examples in the ITS on supervisory reporting, and seeking greater coordination between the authorities in their ad hoc information requests.