CRR: EBA reports on review of large exposures regime

The report analyses the impact of aligning certain aspects of the EU large exposures regime with the standards on large exposures produced by the Basel Committee on Banking Supervision (BCBS). The EBA argues in favour of including only Tier 1 capital instead of allowing also a proportion of Tier 2 capital, as it is currently the case, to help strengthen the large exposures capital base.

The report also deals with exemptions identified in the call for advice, which might currently be used by institutions subject to the discretion of competent authorities or Member States. The report recommends removing three of the five exemptions and, more generally, highlights the importance of reducing exemptions and discretions to further align with the BCBS standards and achieve consistency across jurisdictions.

Finally, the report considers further alignment to the BCBS standards where possible and identifies other issues that require further work.