Art. 509

32013R0575 → 02013R0575-20130628

Article 509 Liquidity requirements 1. EBA shall monitor and evaluate the reports made in accordance with Article 415(1), across currencies and across different business models. EBA shall, after consulting the ESRB, non-financial end-users, the banking industry, competent authorities and the ESCB central banks banks, annually and for the first time by 31 December 2013 report to the Commission on whether a specification of the general liquidity coverage requirement in Part Six based on the items to be reported in accordance with Part Six, Title II and Annex III, considered either individually or cumulatively, is likely to have a material detrimental impact on the business and risk profile of institutions established in the Union or on the stability and orderly functioning of financial markets or on the economy and the stability of the supply of bank lending, with a particular focus on lending to SMEs and on trade financing, including lending under official export credit insurance schemes. The report referred to in the first subparagraph shall take due account of markets and international regulatory developments as well as of the interactions of the liquidity coverage requirement with other prudential requirements under this Regulation such as the risk based risk-based capital ratios as set out in Article 92 and the leverage ratio. The European Parliament and the Council shall be given the opportunity to state their views on the report referred to in the first subparagraph. 2. EBA shall shall, in the report referred to in paragraph 1 1, assess the following following, in particular: (a) the provision of mechanisms restricting the value of liquidity inflows, in particular with a view to determining an appropriate inflow cap and the conditions for its application, taking into account different business models including pass through financing, factoring, … 387 unchanged words … stress, including principles for the use of the stock of liquid assets and the necessary supervisory reactions under which institutions would be able to use their liquid assets to meet liquidity outflows and how to address non-compliance; (k) the definition of an established operational relationship for non-financial customer as referred to in Article 422(3)(c); (l) the calibration of the outflow rate applicable to correspondent banking and prime brokerage services as referred to in the first subparagraph of Article 422(4); (m) mechanisms for the grandfathering of government guaranteed bonds issued to credit institutions as part of Government government support measures with Union State aid approval, such as bonds issued by the National Asset Management Agency (NAMA) in Ireland and by the Spanish Asset Management Company in Spain, designed to remove problem assets from the balance sheets of credit institutions, as assets of extremely high liquidity and credit quality until at least December 2023. 3. EBA shall, after consulting ESMA and the ECB, by 31 December 2013, report to the Commission on appropriate uniform definitions of high and of extremely high liquidity and credit quality of transferable assets for the purposes of Article 416 and appropriate haircuts for assets that would qualify as liquid assets for the purposes of Article 416, with the exception of assets referred to in points (a), (b) and (c) of Article 416(1). The European Parliament and the Council shall be given the opportunity to state their views on that report. The report referred to in the first subparagraph shall also consider: (a) other categories of assets, in particular residential mortgage-backed securities of high liquidity and credit quality; (b) other categories of central bank eligible securities or loans, for example such as local government bonds and commercial paper; and (c) other non-central bank eligible but tradable assets, for example such as equities listed on a recognised exchange, gold, major index linked equity instruments, guaranteed bonds, covered bonds, corporate bonds and funds based on those assets. 4. The report referred to in paragraph 3 shall consider whether, and if, if so to what extent extent, standby credit facilities referred to in point (e) of Article 416(1) should be included as liquid assets in light of international development and taking into account European specificities, including the way monetary policy is performed in the Union. EBA shall in particular test the adequacy of the following criteria and the appropriate levels for such definitions: (a) minimum trade volume of the assets; (b) minimum outstanding volume of the assets; (c) transparent pricing and post-trade information; (d) credit quality steps referred to in Part Three, Title II, Chapter 2; (e) proven record of price stability; (f) average volume traded and average trade size; (g) maximum bid/ask spread; (h) remaining time to maturity; (i) minimum turnover ratio. 5. By 31 January 2014, EBA shall furthermore also report on the following: (a) uniform definitions of high and extremely high liquidity and credit quality; (b) the possible unintended consequences of the definition of liquid assets on the conduct of monetary policy operation and the extent to which: (i) a list of liquid assets that is disconnected from the list of central bank eligible assets may incentivise institutions to submit eligible assets which are not included in the definition of liquid assets in refinancing operations; (ii) regulation of liquidity may disincentivise institutions to lend from lending or borrow borrowing on the unsecured money market and whether this may lead to question the targeting of EONIA in monetary policy implementation; (iii) the introduction of the liquidity coverage requirement may make it more difficult for central banks to ensure price stability by using the existing monetary policy framework and instruments; (c) the operational requirements for the holdings of liquid assets, as referred in points (b) to (f) of Article. Article 417, in line with international regulatory developments.