EACB comments on the EBA’s Consultative paper on amendments to Draft Regulatory Technical Standards on the specification of the calculation of specific credit risk adjustments (EBA/CP/2021/25)
The EACB appreciates the initiative undertaken by the EBA to amend the RTS as it is intended to eliminate an unequal treatment between the IRB and SA. Indeed, it would be appropriate to include in the credit risk adjustment for a NPL buyer to determine the RW, the write-downs accounted for in the transaction price of the exposure which are retained by the seller as realised loss.
Concerning the example provided by the EBA in the CP, it could be stated more explicitly that its aim is to describe the effect whatever could be the accounting treatment by distinguishing re-evaluation and ECL revision.
At the same time, in order to avoid unnecessary administrative expenses and a double burden on CET1 capital due to newly formed risk provisions, we request that the second paragraph of Article 1(1) of the Commission Delegated Regulation (EU) No 183/2014 be amended.