Common reporting framework developed for EU
LONDON - Europe's banking regulators have developed a common financial reporting framework for banks designed to be consistent with new international accounting rules.
The Committee of European Banking Supervisors (CEBS) said the framework, which is outlined in a consultation paper issued in early April, is intended for use by European Union supervisors when they ask banks for consolidated financial information prepared in accordance with the new rules, known as International Financial Reporting Standards (IFRS). IFRS came into effect in many countries, including the 25-nation EU bloc, at the beginning of this year.
The aim is not to cover all aspects of IFRS, said CEBS, the London-based grouping of senior banking supervisors from the EU states. The paper's open to comment until July 8.
CEBS said it doesn't intend imposing additional reporting requirements, but rather to create a common financial reporting framework that will reduce the administrative burden on cross-border banking groups and help to remove a potential obstacle to financial market integration.
This is the second of CEBS's public consultations on prudential reporting requirements for banks and other credit institutions. The first consultation, published in January, focussed on defining a common reporting framework for the solvency ratio under the future EU Capital Requirements Directive (CRD). The CRD is the law that will apply the new risk-based Basel II international bank capital rules to all EU banks and investment firms. The main task of CEBS is to aid the European Commission, the EU's executive arm, in implementing CRD/Basel II.
Separately, CEBS has issued a questionnaire on cross-border mergers in the EU banking sector as part of its work on evaluating the supervisory approaches for approving bank acquisitions. Responses should be made by April 30.
CEBS is focussing on the criteria used by national supervisors when they decide to oppose the acquisition of a bank on the grounds that the take-over could threaten the sound prudential management of the target bank.
