Lombard Risk analyse latest EBA Common Reporting (COREP) regulations for impact to firms

London - 13 June 2012

No change in January 2013 regulatory deadlines

Lombard Risk Management plc (LSE: LRM) ("Lombard Risk"), a leading provider of cross-product collateral management and liquidity, regulatory (including Dodd-Frank) and MIS reporting solutions for the financial services industry, releases analysis of latest (7th June) EBA Common Reporting regulatory announcements for impact on firms facing January 2013 deadlines (to be presented at free online business briefing on Friday 15th June).

Lombard Risk business matter experts, the largest permanent [JP1] UK-based team of any vendor in this space, have been analysing the EBA’s consultations since the release of the CP50 (December 2011) and are already implementing solutions in UK firms.

The European Banking Authority tsunami continues: last week (7th June) the EBA released three important consultation papers, including the eagerly awaited consultation on Liquidity and Leverage; importantly there is also consultation on Own Funds public disclosure which complements the existing approach set out in Consultation Paper CP50 on regulatory reporting and CP/2012/02 which deals mainly with definitions of Own Funds.

  • EBA/CP/2012/04 on Own Funds – consultation open till 31/7/12
  • EBA/CP/2012/05 on Liquidity Coverage and Stable Funding – consultation open till 27/8/12

  • EBA/CP/2012/06 on Leverage Ratio – consultation open till 27/8/12

The EBA’s consultation periods are short (see above), but the urgency is all the more underlined by the fact that the implementation dates in first quarter 2013 are unchanged. Firms must create a comprehensive regulatory environment to cater for Basel III and EBA Common Reporting deadlines of January 2013 which involve:

  • New regulatory calculations: for capital and large exposures
  • New reports: 34 new COREP templates, Large Exposures templates and around a dozen for Liquidity Coverage, Stable Funding and Leverage.

  • New delivery methodology: XBRL

Lombard Risk REPORTER is a fully scalable solution designed for regulatory compliance at branch and/or head office level, with global coverage, with detailed supervisory computations including all Basel III capital and liquidity calculations. Streamlined integration to multiple source systems is enabled by its rich ETL functionality, and stress testing and scenario analysis, now part of the regulatory scene, by Lombard Risk’s LISA solution.

James Philips, Director Regulatory Compliance, explains: “…from our experience and close working relationship with the EBA, we are sufficiently confident about a large proportion of the information that’s required, and will release our calculation engines and reporting templates that meet the final detailed requirements as and when they are published.”

John Wisbey, CEO, added: “This major regulatory change is similar to the situation our clients found themselves in with the FSA’s liquidity regime of 2010. We started work with firms well in advance of the finalisation of the regulation and were able successfully to implement more than 35 systems in good time for clients to meet the FSA’s requirements and remain compliant.”

The work carried out to prepare for the EBA Common Reporting will also help firms meet the January 2013 Basel III deadlines to implement best practices in relation to monitoring, stress tests and management information. The EBA are also responsible for Financial Reporting (FINREP – with up to 69 new templates depending up the accounting standards applied) and the Lombard Risk REPORTER solution will meet those demands as well; providing clients with a single, strategic, ‘open’ solution to meet ALL regulatory demands AND create a unique, central repository of regulatory-ready data from which to create management information, business intelligence and ad-hoc reports as required.

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