European Banking Authority publishes three final draft standards for operational risk business indicator calculation and supervisory reporting

The European Banking Authority has published three final draft technical standards to support implementation of the EU Banking Package, covering how banks calculate and adjust the operational risk Business Indicator, how Business Indicator items map to FINREP, and how institutions must report operational risk information for supervisory monitoring. The Regulatory Technical Standards refine the Business Indicator components to reflect updated accounting standards, set out detailed treatment of operational risk impacts and exclusions, and clarify approaches for calculating the financial component. They also specify how Business Indicator adjustments should be handled in mergers and acquisitions, requiring actual three-year historical data where feasible and allowing alternative methodologies otherwise, and set conditions for disposals including a materiality threshold that permits adjustments without supervisory permission for minor disposals. The Implementing Technical Standards align Business Indicator items to specific FINREP reporting cells and amend the operational risk reporting framework by adding more granular data on Business Indicator component calculations while keeping reporting aligned with the amended regulation. The final draft ITS have been submitted to the European Commission for adoption, after which the EBA will publish the related IT tools and binding instructions. A technical package including the data point model, validation rules and taxonomy is planned for Q4 2025, with the first applicable reporting reference date set at 31 March 2026; an updated mapping tool between supervisory reporting and operational risk disclosure requirements is expected to follow soon.