European Banking Authority Consults On Draft Regulatory Technical Standards On Data Waiver Permissions

European Banking Authority Consults On Draft Regulatory Technical Standards On Data Waiver Permissions

The European Banking Authority (EBA) has published a Consultation Paper on draft Regulatory Technical Standards (RTS) specifying conditions according to which competent authorities may permit institutions to use relevant data covering shorter time periods (data waiver permissions).

Articles 180, 181 and 182 of the Capital Requirements Regulation (CRR) require the EBA to develop draft RTS specifying the conditions according to which competent authorities may grant permission to institutions to use relevant data covering a period of two years rather than five years. It would cover probability of default, own-loss given default and own-conversion factor estimates for certain types of exposures in circumstances when they implement the internal rating based (IRB) approach.

In the Consultation Paper, the EBA recognises the increased uncertainty of the estimation of risk parameters that result from the use of a shorter data history. Therefore, to limit the potential implications for the calculation of own funds requirements, the EBA proposes to introduce limiting conditions for the use of the data waiver principally by excluding low-default portfolios as well as restricting the application of the data waiver to a limited proportion of assets. To further mitigate the risks associated with using shorter data series, the EBA’s proposals also highlight the importance of applying an appropriate margin of conservatism to parameter estimates as well as ensuring that there is an enhanced data vetting process. The EBA has also concluded that after five years of internal ratings based approach implementation, sufficient data history should already be available. Therefore permission for data waiver should not be allowed after five years have elapsed from the initial permission granted to an institution.

The deadline for comments on the Consultation Paper is 7 June 2014. The EBA is required to submit the draft RTS to the European Commission by 31 December 2014.

View Consultation Paper – Draft Regulatory Technical Standards specifying conditions according to which competent authorities may permit institutions to use relevant data covering shorter time period (data waiver permission),7 March 2014

European Parliament Adopts EMIR

European Parliament Adopts EMIR

Following the February 9 announcement that the European Parliament Council and Commission had reached agreement on the European Market Infrastructure Regulation (EMIR) on over-the-counter (OTC) derivative transactions, central counterparties (CCPs) and trade repositories, as reported in the February 24, 2012, edition of Corporate and Financial Weekly Digest, the European Parliament adopted EMIR on March 29. 

Article 29 Working Party Opines On Proposed EU Data Protection Law Reform Package

By | LXBN | March 30, 2012

On March 23, 2012, the Article 29 Working Party (the “Working Party”) adopted an Opinion on the European Commission’s data protection law reform proposals, including the draft Regulation that is of particular importance for businesses. The Working Party’s Opinion serves as the national data protection authorities’ contribution to the legislative process before the European Parliament and the European Council.

Europe’s Take On the World Radio Conference

The World Radiocommunication Conference finished in Geneva in mid-February, after four laborious weeks of debate among more than 3,000 participants from over 150 countries. Now the job comes of interpreting what was decided at the WRC-12 and how it affects different sectors. Participants and officials were looking at these issues in Brussels in the last few weeks.

European Criticism for Google’s New Privacy Policy

By | Info Law Group | February 28, 2012

Google’s new cross-service privacy policy is supposed to come into effect on March 1.  The US Federal Trade Commission has already expressed concerns, and now European data protection authorities have weighed in with the assertion that a “preliminary analysis” indicates that the policy does not satisfy national laws based on the EU Data Protection Directive.  

A Primer On the Europe Union’s New Data Protection Regulations: LXBN Roundtable

By | LXBN | February 22, 2012

The European Union (EU) has been in the news lately for all the wrong reasons.  Italy was hit hard by the recent recession period and is still working to reduce its public debt, and Greece just received its second bailout in two years; this in the form of a $172 billion loan (that’s €130 billion).  However, while the EU struggles with maintaining the stability of a multinational currency and holding together 27 different economies, great strides are being made in other areas of governance.

Earlier this year, as United States Congressmen scrambled to respond to the public backlash against SOPA/PIPA, the EU was busy overhauling their Data Protection Directive.  As the lawyers on Reed Smith‘s Global Regulatory Enforcement Law Blog noted, this Directive (officially released on January 25, 2012) was designed to give more control to internet users over personal data