EBA publishes report on prudential consolidation and ancillary services guidelines
The European Banking Authority (EBA) today released its Report on prudential consolidation and the final Guidelines on ancillary services undertakings (ASU) under the Capital Requirements Regulation (CRR). These publications aim to enhance the efficiency and proportionality of the prudential consolidation framework and foster supervisory convergence across the EU.
Streamlining complex group structures
The Report on prudential consolidation offers targeted recommendations to the European Commission for legislative adjustments to the EU regulatory framework.
It also clarifies areas where EBA investigations identified implementation challenges across EU institutions.
These recommendations aim to enhance the framework's efficiency and proportionality, improve clarity of key definitions, and ensure harmonised application.
Key elements include simplifying sub-consolidation requirements, aligning with accounting standards, refining the definition of control, and clarifying the perimeter of prudential consolidation, particularly for financial conglomerates and the 'Danish compromise'.
Clarifying ancillary services for digital age
The Guidelines on ancillary services undertakings (ASU) establish clear, simple, and consistent criteria for identifying activities falling under the CRR's definition of ASUs.
These include activities considered a 'direct extension of banking,' 'ancillary to banking,' and 'other similar activities.'
The criteria help institutions and authorities identify relevant undertakings, such as those performing operational leasing or data processing services, which is crucial for determining prudential consolidation scope.
The Guidelines also address innovative and digital business models, including fintech, to manage new forms of ancillary risks within banking groups, aiming to promote a level playing field and supervisory convergence.