The European Banking Authority published an Opinion on the European Commission’s proposed amendments to the EBA’s final draft Regulatory Technical Standards specifying operational risk requirements under the Capital Requirements Regulation, warning that two changes could undermine the consistency, transparency and supervisory effectiveness of operational risk capital requirements. One proposed amendment would allow institutions to combine the accounting approach and the prudential boundary approach when calculating the financial component of the business indicator; the EBA argues that a single approach should be applied across the full balance sheet and notes that combining approaches is not envisaged in the Basel standard, could add complexity and inconsistencies, and may facilitate regulatory arbitrage while benefiting only a limited number of institutions. A second amendment would limit notification obligations to competent authorities to material changes in the scope of the prudential boundary approach when used with the accounting approach; the EBA says this would introduce institution-specific materiality judgments and make supervisory review more complex. The EBA supports the Commission’s other proposed amendments that improve readability and legal certainty.
European Banking Authority 2026-04-23
European Banking Authority urges the European Commission to reconsider two amendments to operational risk technical standards
The European Banking Authority published an Opinion on the European Commission’s proposed amendments to Regulatory Technical Standards on operational risk requirements under the Capital Requirements Regulation, warning that two changes could undermine consistency, transparency and supervisory effectiveness. It opposes allowing institutions to combine accounting and prudential boundary approaches for the business indicator and limiting notification obligations on changes to the prudential boundary approach, while supporting other amendments that enhance readability and legal certainty.