EBA Consults on Operational Risk Management Technical Standards

The European Banking Authority (EBA) has published a consultation on draft Regulatory Technical Standards (RTS) for operational risk management frameworks, fulfilling a mandate under the Capital Requirements Regulation (CRR). The proposed standards aim to create a harmonized minimum framework for all CRR-regulated institutions, focusing on governance, process, and systems.

For sophisticated counsel and their financial-institution clients, these draft rules are significant as they clarify the management body’s responsibilities for the risk framework and appetite. They also set minimum expectations for risk identification processes and establish requirements for data collection, analysis, and stress testing to support risk management. The standards will apply to all CRR firms, although proportionality considerations will ease the data collection burden for smaller institutions with a business indicator below EUR 750 million. The draft outlines specific expectations for internal reporting, compliance, validation, and audit functions to ensure timely and accurate data flows to senior management.

The key action is for firms to review the draft RTS and assess their impact on current operational risk frameworks. The consultation period is open until December 31, 2026, providing an opportunity to submit comments.