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On 1 March 2026, the European Commission informed the European Banking Authority (EBA) of its intention to adopt with amendments the draft Regulatory Technical Standards (RTS) supplementing Regulation (EU) No 575/2013 (Capital Requirements Regulation) regarding the components of the business indicator under Article 314(9)(a) of the CRR. The EBA originally submitted the draft RTS on 16 June 2025, which specified which items should be considered within business indicator components, including the interest, leases and dividend component, the services component, and the financial component. The Commission identified that the draft RTS imposed an excessively rigid approach to the prudential boundary approach (PBA)—an alternative calculation method for the financial component—by requiring its application across an entire bank's balance sheet. This would have significantly curtailed the PBA's applicability, contradicting the CRR's original objective. The Commission's amendments aim to enable more flexible use of the PBA for specific portfolios where the accounting-based approach would be disproportionate. Key changes include modifications to Article 12 of the draft RTS, which specifies the PBA's scope of application, and limited adjustments to Article 9, which sets conditions for assessing the appropriateness of PBA use. These amendments seek to balance allowing banks to exercise the PBA option while ensuring supervisors can assess its appropriateness. The EBA has six weeks from 1 March 2026 to amend the draft RTS based on the Commission's proposed amendments and resubmit it as a formal opinion. If the EBA does not submit an amended draft or submits one inconsistent with the Commission's proposals by the deadline, the Commission may adopt the RTS with its amendments or reject it entirely. REFERENCES: European Commission Directorate-General for Financial Stability, Financial Services and Capital Markets Union. Letter from John Berrigan to Helmut Ettl, Acting Chair, European Banking Authority. 1 March 2026. Reference: fisma.d.1(2026)2342012/AG.

On April 23, 2026, the European Banking Authority (EBA) published a letter from the European Commission stating its intention to adopt with amendments the draft Regulatory Technical Standards (RTS) supplementing Regulation (EU) No. 575/2013 (Capital Requirements Regulation - CRR) regarding the components of the business indicator under Article 314(9)(a) of the CRR. The EBA originally submitted the draft RTS on June 16, 2025, which specified which items should be considered within business indicator components, including the interest, leases and dividend component, the services component and the financial component. The commission identified that the draft RTS imposed an excessively rigid approach to the prudential boundary approach (PBA), an alternative calculation method for the financial component, by requiring its application across an entire bank's balance sheet. This would have significantly curtailed the PBA's applicability, contradicting the CRR's original objective. The commission's amendments aim to enable more flexible use of the PBA for specific portfolios where the accounting-based approach would be disproportionate. Key changes include modifications to Article 12 of the draft RTS, which specifies the PBA's scope of application, and limited adjustments to Article 9, which sets conditions for assessing the appropriateness of PBA use. The EBA has six weeks from March 1, 2026 to amend the draft RTS based on the commission's proposed amendments and resubmit it as a formal opinion.

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European Commission Intends to Adopt Amended Regulatory Technical Standards on Operational Risk Business Indicator Components

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European Banking Authority Publishes European Commission's Letter on Draft Regulatory Technical Standards on the Business Risk Indicator