Impact assessment

The EBA considers it adequate to provide an impact assessment which analyses ‘the potential related costs and benefits’ of the policy provided in the GL. This analysis provides the reader with an overview of the findings as regards problem identification, options identified to remove problems and their potential impacts.

The following analysis consists basically of three parts, where the baseline scenario in terms of current practices and supervisory expectations starts from the analysis performed for the purpose of the reports on comparability and pro-cyclicality of capital requirements published by the EBA in December 2013. In terms of the regulatory environment, the baseline scenario is set out by the GL specified by the Committee of European Banking Supervisors (CEBS) in 2006 (GL 10), under the assumption that this guidance has been followed by institutions when developing their risk parameter estimation methodologies. The second part contains the options considered with respect to the major policy decisions that have been analysed and discussed in the finalisation of these GL. Finally, the draft cost-benefit analysis is based on the main policy changes in comparison with the currently applicable GL 10.