A number of the main European financial conglomerates are led by cooperative banks, policy development in this area is therefore of high importance for EACB members.
Our members see that the approach proposed in the consultation on the draft Guide fundamentally revises the basic principles of the established ITS on supervisory reporting of risk concentrations and intra-group transactions (ITS on RC-IGT), particularly when it comes to the IGT threshold calculation.
As the implementation scenarios have been built over an intense process on the basis of the requirements set out in the ITS, the other existing regulatory products (FICOD, RTS on IGT-RC) and the exchanges with respective JSTs, the timeline for conglomerates to comply with the new expectations appears too short.
We question the sudden change of methodology on key concepts of the report and the legal effects of the Guide as many principles do not appear to stem from existing regulatory requirements.
The new level of thresholds proposed, which are expressed on absolute values, appears to be very low compared to the current situation (ratio of 15 to one) and do not duly embed the proportionality principle.
The appreciation of the significant transactions through the prism of the notion of Single Economic Operation is also completely reviewed.
In addition, the basis used for the calculation of these thresholds seems to be inconsistent with the supervisory objectives pursued at the level of the Financial Conglomerates.
We believe a more balanced perspective is necessary, to take into consideration the proportionality principle with a report outlining the most significant operations that would be useful from a supervisory standpoint, without creating an additional overflow of information.
Finally, we believe that at least for the first reporting cycle institutions should be allowed to report on a best effort basis.