This glossary contains terms and abbreviations in the field of regulatory reporting. It should help you to get a quick and general overview of the respective terms.
The Comprehensive Assessment (CA) was a financial health check of banks by the European Central Bank (ECB) in 2014. The 25 biggest banks in Germany passed this check with good results. The CA consisted of an Asset Quality Review (AQR) and Stress Tests.
The Countercyclical Capital Buffer (CCB) was introduced with Basel III. The CCB is an additional capital requirement for banks concerning the Tier-1-Capital and is used in times of excessive credit development. In emergency situations the created buffer can be used to cover losses.
The Central counterparty (CCP) acts as an intermediary between a buyer and a seller. This seems unnecessarily complicated, but serves to anonymize a trade in particular.
The Committee of European Banking Supervisors (CEBS) was an independent committee of the European banking supervisors settled in London. It took up its activities in January 2004. The main tasks of the CEBS were the consultation with the European commission, the support of the harmonized implementation of the supervisory law as well as the improvement of the cooperation of the regulatory authorities of the EU countries. On January 1, 2011 the CEBS was transformed into the European Banking Authority (EBA).
The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) was an independent committee of the European insurance supervision authorities settled in Frankfurt. It took up its activities in January 2004. The tasks of the CEIOPS were the reform of the European insurance supervisory law, the improvement of the cooperation of the regulatory authorities of the EU countries as well as the supervision of the harmonized implementation of the uniform guidelines of the EU. On January 1, 2011 the CEIOPS was transformed into the European Insurance and Occupational Pensions Authority (EIOPA).
The Common Equity Tier-1 Capital (CET1) mainly consists of share capital and retained earnings. It is part of the Tier-1-Capital.
The Common Reporting Framework (CoRep) is an IT standard for the reporting of capital requirements established on May 30, 2014. Own Funds, Large Exposure, IP Losses, LCR/NSFR, Leverage Ratio and Asset Encumbrance need to be reported.
The Credit Risk (CR) describes the danger or the risk, that a borrower doesn't repay or repays only a part of a credit that has been granted.
New in the Capital Requirements Directive (CRD IV) are the requirements for corporate governance, sanctions, capital buffers and improved supervisory procedures.
The CRD IV package is, with the CRR, an integral part of the Single Rulebook, introducing EU-wide harmonized liquidity requirements and harmonizing the European banking supervision law, providing a uniform legal framework and preventing regulatory arbitrage. Nevertheless, the member states have a certain amount of freedom to be able to take national characteristics into account (for example the relationship between overall economy and the development of lending). The CRD IV package applies to all deposit institutions within the EU and partially to all investment firms.
The CRD IV must be implemented in national law and has been legally valid in Germany since September 3, 2013 (CRD IV implementing act). It affects the German Banking Act (KWG) and the German Solvency Regulation (SolvV). The new reporting requirements will be regulated by the Financial Information Regulation (FinaV), which will replace the Monthly Returns Regulation (MonAWV).
The European Capital Requirements Directive (CRD IV) was implemented on a national level by the CRD IV Implementation Act, which was published in Germany on September 3, 2013.
The Capital Requirements Regulation (CRR I) is an EU implementing provision based on Basel III. This regulation has a direct binding effect on all EU institutions: It includes detailed requirements for credit institutions and investment firms and especially regulates equity capital, liquidity, maximum leverage ratio as well as counterparty risk.
A Europe-wide harmonized maximum leverage ratio will be determined at the beginning of 2018. It is not foreseeable, if this will be a binding risk-independent measure alongside the already established risk-based minimum equity requirements (Pillar I) or a part of the Supervisory Review and Evaluation Process (SREP) of an institution (Pillar II).
The CRR is immediately applicable, so there is no need for implementation. However existing national law needs to be adjusted so that there are no competitive or inconsistent regulations anymore. In Germany especially the German Banking Act (KWG), the German Solvency Regulation (SolvV) and the German Regulation on Large Loan Exposure and Million Loans (GroMiKV) are affected.
It was published on June 26, 2013, aand a revised version was published on November 30, 2013. Most regulations have bee applicable since January 1, 2014.
The Credit Risk Standardized Approach (CRSA) is part of Pillar I of Basel II. It is used for the assessment of the Credit Risk based on external ratings and risk weights given by the regulator. This general approach is an alternative to the Internal-Ratings-Based Approach (IRBA).
The Credit Valuation Adjustment (CVA) describes the risk of reduction of the economic value of derivatives as a result of a downgrading of the rating of the derivative counterparty.
CVA Obliged Transactions are all contracts, where the supply of the basic values and the payment are postponed by more than two trading days. These include OTC derivatives and securities financing transactions.