Enhancing Pillar 3 | EBA Proposes New Liquidity Disclosure Requirements

The European Banking Authority (EBA) launched a consultation on new liquidity disclosures on 11 May. In particular, the EBA is proposing that banks disclose their Liquidity Coverage Ratio (LCR) figures at least annually.

There is no explicit requirement in the Capital Requirements Regulation (CRR) for banks to disclose liquidity information in their Pillar 3. Nor is there a mandate for the EBA to produce guidelines on liquidity disclosure. However, the Basel Committee have called for mandatory LCR disclosure. The EBA is relying on CRR Article 435(1)(f), which requires banks to disclose "key ratios and figures providing external stakeholders with a comprehensive view" of risk management. The EBA argues that the LCR is currently the only key ratio used in current liquidity regulations and therefore it ought to be disclosed under Article 435(1)(f).