๐๐ผ๐ผ๐ฑ ๐ป๐ฒ๐๐ ๐ณ๐ฟ๐ผ๐บ ๐๐ต๐ฒ ๐๐๐ ๐ณ๐ผ๐ฟ ๐ฎ๐ฐ๐พ๐๐ถ๐ฟ๐ถ๐ป๐ด ๐ฏ๐ฎ๐ป๐ธ๐!
In its March 2024 draft Regulatory Technical Standards (RTS), the ๐๐ฎ๐ซ๐จ๐ฉ๐๐๐ง ๐๐๐ง๐ค๐ข๐ง๐ ๐๐ฎ๐ญ๐ก๐จ๐ซ๐ข๐ญ๐ฒ (๐๐๐) had proposed that acquiring banks include ๐ฑ๐ฌ% ๐จ๐ ๐ฉ๐จ๐ญ๐๐ง๐ญ๐ข๐๐ฅ ๐๐ก๐๐ซ๐ ๐๐๐๐๐ค๐ฌ in their credit risk calculations under the ๐๐๐ฉ๐ข๐ญ๐๐ฅ ๐๐๐ช๐ฎ๐ข๐ซ๐๐ฆ๐๐ง๐ญ๐ฌ ๐๐๐ ๐ฎ๐ฅ๐๐ญ๐ข๐จ๐ง (๐๐๐) โ a methodology that would have disproportionately increased capital requirements, without reflecting the actual low risk posed by chargebacks.
Yesterday, the EBA issued its ๐ณ๐ถ๐ป๐ฎ๐น ๐ฑ๐ฟ๐ฎ๐ณ๐ ๐ฅ๐ง๐ฆ and decided that acquiring banks will ๐ป๐ผ ๐น๐ผ๐ป๐ด๐ฒ๐ฟ ๐ป๐ฒ๐ฒ๐ฑ ๐๐ผ ๐ถ๐ป๐ฐ๐น๐๐ฑ๐ฒ ๐ฐ๐ต๐ฎ๐ฟ๐ด๐ฒ๐ฏ๐ฎ๐ฐ๐ธ ๐ฟ๐ถ๐๐ธ๐ in their credit risk calculations (unless expressly required by national authorities). The EBA also confirmed that its earlier ๐ค&๐ ๐ฎ๐ฌ๐ญ๐ฒ_๐ฎ๐ต๐ญ๐ฒ on chargeback risks will be withdrawn.
This is a ๐๐ฒ๐ฟ๐ ๐ฝ๐ผ๐๐ถ๐๐ถ๐๐ฒ ๐ฑ๐ฒ๐๐ฒ๐น๐ผ๐ฝ๐บ๐ฒ๐ป๐, but the legislative process is not over: the European Commission must now decide whether to endorse the RTS or propose amendments. If endorsed, the Council and Parliament will then have three months to scrutinize the RTS.
We will continue to monitor the legislative process and keep industry stakeholders informed.