EBA responds to EC's proposed changes to its final draft RTS on operational risk

The European Banking Authority (EBA) has published an opinion responding to the European Commission's (EC) proposed amendments to the EBA's final draft regulatory technical standards (RTS) on operational risk under the Capital Requirements Regulation (CRR) as amended by CRR3. The EBA previously published reports on the final draft RTS and implementing technical standards in June 2025, followed by further final draft RTS on operational risk loss, in August 2025. In March, the EC informed the EBA in a letter of its intention to endorse the draft RTS with amendments, including bundling the RTS into one single Commission Delegated Regulation.

The EBA raises concerns that two of the EC's proposed changes could undermine the consistency, transparency and supervisory effectiveness of the operational risk capital framework and invites the EC to reconsider them. In particular, the EBA objects to the proposed combined use of the accounting approach (AA) and prudential boundary approach (PBA) for calculating the financial component of the business indicator, noting that this is not envisaged under the Basel standard and could increase complexity, create inconsistencies across risk frameworks and facilitate regulatory arbitrage. It considers that the application of only one approach to the full balance sheet is necessary to preserve the coherence of the framework. The EBA also cautions against limiting notification obligations to competent authorities to material changes in the PBA's scope when used alongside the AA, arguing this could weaken supervisory oversight by introducing institution-specific materiality judgements. The EBA nonetheless supports the EC's other amendments aimed at improving readability and legal certainty.

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