The EBA has continually refined its implementing technical standards (ITS) on supervisory reporting with regard to financial reporting (FinRep). The objective of the ITS is to contribute to the stability of the financial markets, through the obligation to report financial information resulting from Article 99 of the Capital Requirements Regulation (CRR), which calls for the harmonization of regulatory requirements across Europe as well as the provision of a detailed overview of institution-specific risk profiles.
Over the past years, FinRep requirements have expanded from the consolidated level of “significant supervised groups” to include individual “significant supervised entities and subsidiaries”, driven by the ECB’s Regulation (EU) 2015/534. This extension of reporting (“FinRep Solo”) was completed when “less-significant” banking operations became subject to FinRep reporting, starting from 30 June 2017.
The most recent amendments to FinRep in Reg (EU) 2017/1443 are a reaction to evolving international accounting principles, i.e., the introduction of the concept of expected losses with IFRS 9.
Currently under advisement by the European Commission are proposed changes (EBA/ITS/2019/02) that aim at amending and adding new reporting of non-performing and forborne exposures (NPEs & FBEs), amending the reporting of profit or loss items (especially concerning expenses), and the reporting on leases according to the new IFRS 16.
One challenge of FinRep is the ever-growing data volume. The other challenge is to maintain data quality with respect to data consistency and availability. These regulations require effective processes and system landscapes as well as the integration of reporting and accounting.
BearingPoint offers with Abacus Banking Regulatory a reporting software that covers all financial reporting requirements of the EBA and ECB.