EBA confirm approach to postponement of revised market risk framework

The European Banking Authority (EBA) published a statement confirming that following the European Commission's Delegated Act postponing the application of the market risk framework (FRTB) by one more year, to 1 January 2027, the EBA's no action letter published on 12 August 2024 would remain fully valid and in place. The no action letter advises national competent authorities not to prioritise supervisory or enforcement actions regarding the application of the boundary between the trading and non-trading book until the full FRTB is implemented for the purposes of calculating binding own funds requirements. In addition, the EBA's considerations on specific issues arising from the FRTB postponement would also remain valid and applicable during the extended postponement period. These relate to the market risk contribution to the output floor, structural foreign exchange positions, threshold calculations using 'main risk driver' approach, recognition of CVA hedges, disclosures and reporting, and operational risk boundary alignment. The EBA also states that for the supervisory benchmarking exercise, institutions will keep applying the CRR2-IMA for the calculation of the own funds requirements for market risk. Institutions that continue to apply the CRR2-IMA remain in the scope of the mandate of Article 78 of Directive 2013/36 (CRD IV) and are expected to take part in the market risk part of the supervisory benchmarking exercise 2026 in accordance with the revised benchmarking ITS published the same day as this statement. Other entities are not expected to participate in that part of the exercise.

Return to main website.