EBA Opinion Opposing Commission Amendments to Operational Risk RTS
Summary
The EBA published an Opinion on 23 April 2026 responding to the European Commission's proposed amendments to draft RTS on operational risk under CRR. The EBA objects to two amendments: first, allowing combined use of the Accounting Approach (AA) and Prudential Boundary Approach (PBA) for calculating the business indicator's financial component, which the EBA says creates complexity, inconsistencies, and regulatory arbitrage not envisaged in Basel standards; second, limiting PBA notification obligations to material changes, which the EBA says weakens supervisory effectiveness by introducing institution-specific materiality judgments. The EBA invites the Commission to reconsider these amendments while supporting other clarifying amendments.
“The EBA considers that requiring institutions to apply only one approach to the full balance sheet is necessary to preserve the coherence of the framework.”
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What changed
The EBA published an Opinion responding to the Commission's proposed amendments to the draft RTS on operational risk under Articles 311a to 323 of CRR. The EBA opposes two amendments: allowing combined use of the Accounting Approach (AA) and Prudential Boundary Approach (PBA) for the financial component of the business indicator, and limiting notification obligations to material PBA scope changes. The EBA argues the combined approach is not in the Basel standard, may increase complexity, create inconsistencies, and facilitate regulatory arbitrage. It also argues that limiting notification to material changes introduces institution-specific judgments that complicate supervisory reviews. The EBA supports other amendments improving readability and legal certainty.
Credit institutions using the Business Indicator approach for operational risk capital calculations should monitor these developments closely. Firms that currently apply different approaches to different parts of their balance sheet could face recalibration if the combined AA/PBA approach is rejected. Compliance and risk management teams should ensure notification procedures align with current RTS expectations pending final resolution of these amendments.
Archived snapshot
Apr 23, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
The EBA responds to the Commission’s proposed changes to its draft technical standards on operational risk
- Press Release
- 23 April 2026
The European Banking Authority (EBA) has today published an Opinion on the European Commission’s proposed amendments to the final draft Regulatory Technical Standards (RTS) specifying operational risk requirements under the Capital Requirements Regulation (CRR). It considers that two amendments proposed by the Commission could affect the consistency, transparency and supervisory effectiveness of capital requirements for operational risk.
On 2 March 2026, the European Commission informed the EBA of its intention to endorse, with amendments, the draft RTS submitted by the EBA in June and August 2025.
The EBA reaffirms its commitment to a prudent, transparent and consistent implementation of the operational risk framework and invites the European Commission to reconsider two of these amendments.
First, the Commission proposes to allow the combined use of the accounting approach (AA) and the prudential boundary approach (PBA) for the calculation of the financial component of the business indicator. The EBA considers that requiring institutions to apply only one approach to the full balance sheet is necessary to preserve the coherence of the framework. The combined use of both approaches is not envisaged in the Basel standard and may increase complexity, create inconsistencies across risk frameworks and facilitate regulatory arbitrage, while benefiting only a limited number of institutions.
Second, the Commission proposes to limit notification obligations to competent authorities to material changes in the scope of the PBA when used in combination with the AA. The EBA considers that this could weaken supervisory effectiveness by introducing institution-specific materiality judgments making supervisory reviews more complex.
The EBA supports the other amendments proposed which improve readability and legal certainty.
Legal basis and background
This Opinion is issued under Article 10(1) of Regulation (EU) No 1093/2010, which requires the EBA to provide an opinion where the European Commission intends to endorse draft RTS with amendments.
The prudential treatment of operational risk is set out in Articles 311a to 323 of Regulation (EU) No 575/2013 (CRR). The RTS developed by the EBA specify the components of the business indicator, adjustments to profit and loss data and a harmonised risk taxonomy for operational risk.
Documents
Opinion on European Commission's amendments to RTS on operational risk
(500.69 KB - PDF)
EBA letter to EC regarding EBA Opinion on EC proposal RTS on Operational Risk
(231.37 KB - PDF)
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