No, institutions can make use of the transitional provision under Article 473a of the CRR in order to mitigate the impact on the CET1 ratio.

Background: the expected loss provisions recognised by an institution cannot be used to absorb additional losses in the balance sheet. Out of concern that stage 1 and 2 expected loss provisions may rise sharply in the event of an economic downturn, the CRR allows institutions, for a transitional period, to add back to CET1 stage 1 and 2 expected loss provisions in order to mitigate, in particular, an increase in loss provisioning compared to the level prior to initial application of IFRS 9 in 2018; the amounts which can be added back are expressed as a percentage and will decrease over time. For further details, particularly with regard to the Internal Ratings-Based Approach (IRBA), see Article 473a(4) and (5) of the CRR. Add-back amounts: 2020 70%, 2021 50%, 2022 25%.

Institutions may still apply to make use of this transitional arrangement by submitting a corresponding application to their competent supervisory authority (ECB or BaFin). With respect to LSIs, which are solely subject to supervision by the national authority, notification must be given to BaFin. In light of the current situation involving the novel coronavirus (COVID-19), applications will automatically be considered approved up until 30 April 2020. Applications from SIs will be forwarded to the competent supervisors at the ECB.

Article 178(3)(d) applies to cases in which an institution grants concessions towards an obligor experiencing financial difficulties, for example, by lowering the agreed interest rate in an individual case. If an institution reduces interest rates for an obligor that is not experiencing financial difficulties, then this does not constitute a default under Article 178(3)(d) of the CRR. This applies regardless of whether the institution reduces the interest rate in an individual case (e.g. as the result of negotiations with a particular obligor) or whether this is done for multiple obligors at the same time (e,g. because the institution passes on more favourable refinancing costs to multiple obligors at the same time following operations involving the central bank).

As explicitly set out in Article 412 of the CRR and as consistently emphasised by the supervisory authorities with regard to the regulatory aim of the liquidity requirements, institutions are permitted, in times of stress, to use the liquid assets held in compliance with the liquidity coverage requirement (LCR). They can thus use the liquidity buffer in the current situation; even if this means the LCR minimum requirements are not met, it will not be necessary to obtain the prior approval of the competent supervisory authority. In accordance with Article 414 of the CRR, where an institution does not meet, or does not expect to meet, the LCR minimum requirements, it must merely notify the competent authorities without delay.

The supervisors responsible for the institution at BaFin and at the Deutsche Bundesbank will determine the specific information requirements that will apply until the LCR minimum requirements are again met. Alternatively, or in addition to the supervisory reporting under Implementing Regulation (EU) 680/2014, this can include the use of “liquidity calls”, internal liquidity reporting and/or projections or even LCR approximations. Furthermore, an LSI must always notify the supervisors responsible for the institution at BaFin and at the Deutsche Bundesbank without delay if the liquidity coverage ratio shows any continued decreases to levels of less than 90%, 80%, 70%, etc. In light of this additional duty to provide information, BaFin will generally waive the requirement for LSIs to submit daily liquidity reports under Implementing Regulation (EU) 680/2014.

As a rule, BaFin will be adopting a generous approach in assessing the institutions’ plans to restore the LCR. It is likely that BaFin will expect the minimum ratio to be restored only once the economic situation has again improved. BaFin will work with the institution to determine the specific steps to be taken.

No. A forbearance measure is a concession by an institution towards an obligor that is experiencing financial difficulties. If an institution postpones a loan as part of a general payment moratorium, this is not considered a forbearance measure within the meaning of Article 47b of the CRR because the institution does not decide to postpone the loan for a specific obligor; rather, the postponement applies to a larger group of obligors without regard to their specific individual financial situation.

The function and purpose common to all capital buffer requirements is that institutions build up a capital buffer during good times in order to safeguard against potential negative developments and that they then use this buffer in the event that such negative developments actually occur. In the current situation, it is possible for institutions to use the capital contained in the capital buffers, in particular for the purposes of granting loans.

If an institution fails to meet the combined buffer requirement, this does not represent a breach of supervisory minimum capital requirements but rather the appropriate use of available equity. There are therefore no grounds for the competent supervisory authorities to object to this appropriate usage of the capital buffer. This is all the more true given the fact that the statutory provisions provide for institutions to rebuild this capital buffer over an extended period of time after the crisis.

Nonetheless, the restrictions on distributions stipulated under section 10i of the KWG must be observed. BaFin will take the changed circumstances into account with regard to the requirements applicable to the capital conservation plan, which must be submitted in accordance with section 10i (6) of the KWG. For the moment, institutions are expected to inform BaFin without delay of a failure to meet the combined buffer requirement. BaFin will discuss capital planning with the institutions, taking into consideration all circumstances in each individual case and, together with the institution, will set a deadline for the submission of a capital conservation plan that meets the statutory requirements and agree on the actual implementation of specific measures to restore capital in order to ensure compliance with the combined buffer requirements once the current situation has been resolved.

Work on amendments to the MaRisk are continuing with some delay; here it should be noted that the new specifications will not apply on the reference date 31 December 2020 and are not relevant to audits conducted for the year 2020. Even after the implementation of these new specifications at the beginning of 2021, the standard practice of granting transitional periods for new requirements will be applied; such transitional periods are determined by BaFin on the basis of sound judgement. It should also be noted that some groups of institutions can expect certain simplifications as a result of the implementation of the EBA Guidelines on outsourcing arrangements.

Due to the challenges posed by the coronavirus pandemic this year, BaFin and the Deutsche Bundesbank have decided that the stress test for less significant institutions (LSIs) under national supervision will be postponed from 2021 to 2022. The provisional schedule, including the test run planned for autumn 2020, will therefore be postponed by one year. BaFin and the Deutsche Bundesbank will provide a new schedule to the expert committee in charge of the LSI stress test as soon as they are better able to assess the consequences of the coronavirus pandemic.

There are currently no plans to deviate from the application dates stipulated in the CRR II/CRD V. The matter would require a uniform decision to be taken at the European level. Unless the necessary changes are made to the European requirements, the implementation deadlines and application dates specified at the European level are binding at the national level.

If the KfW grants an institution exemption from liability for a loan it has granted, BaFin will not object if that institution, within the scope provided for by the exemption from liability, does not meet the own funds requirement for that loan and does not count the loan towards the large exposure limit.

On 2 June 2020, the EBA BoS published Guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis. These Guidelines set out reporting and disclosure requirements for information and data on the application of payment moratoria within the scope of the “Guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the COVID-19 crisis (EBA GL 2020/02)” and on public guarantees for new loans and forbearance measures granted against the backdrop of the COVID-19 crisis. The additional reporting requirements will apply for an expected period of 18 months.

On 16.12.2022 the EBA published its EBA Closure Report of Covid-19 Measures which was welcomed by BaFin and Deutsche Bundesbank. In para 16 of the report the EBA states that it repeals the Guidelines EBA/GL/2020/07 from 01.01.2023. Therefore, the final submission under these additional reporting requirements will be made for the reference date 31.12.2022.

Scope of application

The reports under the EBA Guidelines are to be submitted by all CRR credit institutions, both at the level of the individual institutions and at group level, taking into account the waiver under Article 7 of the CRR. In addition, promotional banks must also submit such reports.

Scope of reporting

All institutions subject to the reporting requirement must submit the following reporting templates: F 90.01, F 90.02, F 91.01, F 91.02 and F 91.05 (Annex 1). This applies regardless of the consolidated level or size of an institution.

Frequency of reporting

All reporting forms included in the scope of reporting are to be submitted on a quarterly basis. The reports are to be submitted to the Deutsche Bundesbank in line with the reporting deadlines for CoRep/FINREP reporting under the ITS on Supervisory Reporting.

First submission date

The planned use of XBRL for collecting reporting data requires a certain amount of time to implement. In light of this, the report as per September 2020 will be the first report to be submitted (with the deadline for submission 11 November 2020).

It is not necessary to also submit the reports as per June 2020.

Disclosure

Under the EBA Guidelines, the disclosure requirements may be waived for institutions. BaFin and the Deutsche Bundesbank have chosen to exercise this option. German LSIs and promotional banks are therefore not subject to the disclosure requirements under the EBA Guidelines.