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EU Commission Publishes Liikanen FAQs

On 7 June 2013, the European Commission published an FAQ document regarding its May 2013 consultation on the Structural Reform of the EU Banking Sector (the Liikanen Reforms) – see this blog post for more detail.  The FAQs have been drafted in response to requests for clarification about the data templates published as part of the May consultation and deal with the following issues:

  • The nature of the treatment afforded to confidential information submitted by respondents;
  • Scenario analysis, specifically:
    • the impact on the group’s balance sheet and P&L resulting from the enactment of CRDIV and the Bank Recovery and Resolution Directive;
    • whether the scenarios assume the existence of specific underlying corporate structures;
    • the extent to which a trading entity can be funded by deposits;
    • how netted derivatives are to be reported;
    • how “matched principal” trading, “provision of direct market access to customers” and hedging activity are to be treated in relation to market making;
    • how exposures to venture capital, private equity and hedge funds are to be defined; and
    • how short-term and long-term securities are to be distinguished.
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