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CFA, Manager, Financial Services
Manager, Financial Services
Senior Manager, Financial Services
Senior Manager, Financial Services
Module 1 of the EBA’s nine-module simplification package (EBA/CP/2026/07) rewrites the reporting requirements for the Additional Liquidity Monitoring Metrics (ALMM) and Asset Encumbrance (AE), amending the Implementing Technical Standards (ITS) on supervisory reporting under Commission Implementing Regulation (EU) 2024/3117. The consultation closed on 10 July 2026, with first application envisaged for the reporting reference date of 30 September 2027.
The reform traces back to 2023, when supervisors waited 50 to 60 days for updated liquidity profiles and several began building their own ad-hoc collections, which the EBA now intends to absorb and retire. Reporting becomes more granular, in places more frequent, and much closer to the way treasury steers the balance sheet. Small and medium-sized institutions gain targeted relief; for large institutions the load rises. What follows sets out what changes, for whom, and where the implementation work sits.
Module 1 treats the two frameworks as one liquidity view rather than two. A central table of concepts in the ALMM instructions now defines terms for both, aligning definitions that had drifted apart — “deposit” among them, where AE and ALMM usage are brought into line. The template annexes add a mapping between AE and the counterbalancing capacity (CBC) section of the maturity ladder (C 66.01). That convergence is what drives the AE overhaul.
The module’s most far-reaching change is in AE reporting. New templates F 32.11 and F 32.12 replace F 32.01 and F 32.02, swapping the framework’s accounting perspective for a treasury one consistent with CBC logic. Assets and collateral received are broken down by CBC asset class, tradability and HQLA level (Level 1, 2A and 2B), with new columns for the liquidity value after haircuts and for assets used in or eligible for central bank monetary policy operations, including pre-positioned collateral. In practice this moves the origin of the data: figures that finance has sourced from the accounting ledger must now come from treasury and collateral management systems, with the lineage evidenced end to end.
The EBA’s argument is that the accounting-aligned template answered neither of two supervisory questions: whether an institution can shift to secured funding when it needs to, and how much liquidity it could realistically raise against its collateral. F 36.01 and F 36.02 are replaced by F 36.11 and F 36.12, with medium-sized institutions exempted entirely. Encumbrance within collateral pools will be allocated in order of increasing liquidity rather than pro rata, preserving the most liquid assets for the buffer. Unrealised gains and losses in collateral pools become reportable for the first time — a direct lesson from 2023.
On the LCR side, simplification is confined to collateral swaps. Small and non-complex institutions (SNCIs) are exempted from C 75.01 altogether; large and medium-sized institutions move from monthly to quarterly reporting, and the significant-currency breakdown falls away. This is reporting relief only — the LCR requirement and its calculation are unaffected.
AE reporting is to follow the liquidity scope of consolidation rather than the prudential scope it uses today, so that encumbrance and ALMM data can finally be analysed together. The effect is institution-specific: banks whose liquidity scope covers more entities than their capital scope will have to bring additional entities in, while those with a narrower liquidity scope may report fewer. Whether the change adds work or removes it comes down to group structure and the waivers in place. That determination is worth making early, because it sizes everything else.
Maturity ladder (C 66.01): Additional daily time buckets at the short end spare banks from scaling up infrastructure mid-crisis. New rows capture excess operational deposits, deposits collected through online third-party platforms, and negotiable certificates of deposit and commercial paper; new “of which” rows identify intragroup FX swaps. Behavioural information leaves the template in exchange, and medium-sized institutions and SNCIs are exempted from it entirely.
New behavioural template (C 66.02): Large institutions will report behavioural data on open-maturity items monthly, including new business assumptions, because current reporting treats sight deposits as immediately callable and so misstates the real net liquidity position. The monthly frequency tracks how often treasury functions update their modelling, and supervisors will be able to back-test what is reported. Once assumptions are systematically back-testable, they are also systematically challengeable, which makes C 66.02 as much a model governance and documentation question as a reporting one. Granular downgrade-trigger detail also moves here, with the aggregate staying in C 66.01.
Concentration of funding by counterparty (C 67.00 / C 67.01): Large institutions move from the top 10 counterparties to the top 30, in a new but content-identical C 67.01; medium-sized institutions and SNCIs keep the top 10 in C 67.00. The 1% of total liabilities threshold is removed for all institutions, and “other financial corporations” is split more finely to expose non-bank financial sector links.
Concentration of funding by product type (C 68.00): Deposits gain a per-client size breakdown and a split by withdrawability. Capital instruments (AT1 other than preferred shares, and T2) and central bank funding — EEA, Eurosystem and non-EEA — are added, plus a column for intragroup or IPS funding.
Prices for various lengths of funding (C 69.00): Spreads give way to interest rates: inconsistent benchmark and swap curve methodologies had made spreads unusable for comparison, and supervisors can reconstruct them against a single reference curve. Senior preferred and senior non-preferred bonds are split, repurchase agreements and capital instruments added, and a new column captures funding of ten years or more. Medium-sized institutions are exempted entirely. The switch from spread to interest rate looks presentational but reaches into source systems and, for many institutions, into funds transfer pricing.
The roll-over of funding template (C 70.00) is discontinued without replacement, along with F 32.03, made largely redundant by the AE realignment, and F 34.00 on contingent encumbrance. F 33.00 (maturity data) and F 35.00 (covered bond issuances) were flagged alongside them as least used in the EBA’s cost-of-compliance study, but both survive reassessment; SNCIs will be exempted from F 35.00.
Proportionality is sharpened, and it cuts both ways. SNCIs gain full exemption from C 75.01, C 71.00, F 32.04 and F 35.00, leaving just two templates in the asset encumbrance area (F 32.11 and F 32.12). Medium-sized institutions gain exemptions from C 69.00, from the F 36 templates and from behavioural reporting, plus the reduced C 75.01 frequency.
Large institutions carry the additional requirements alone: the granular downgrade-trigger reporting, the new behavioural template C 66.02 and the extended counterparty reporting in C 67.01. We therefore expect genuine net relief for smaller and medium-sized institutions, while for large institutions the burden is likely to rise rather than fall despite the individual template deletions. Relief on paper is not the same as relief in practice: institutions dropping templates still have to prove the exemption applies and adjust processes that were built around the deleted returns.
The industry is not convinced the simplification package reduces the regulatory load. In its consultation response, the German Banking Industry Committee asked for a later first application date, held that the package shifts effort into recurring reporting rather than reducing it, and flagged the alignment of asset encumbrance with liquidity reporting as especially demanding.
With the consultation closed, the EBA will assess the responses, finalise the technical standards and submit them to the European Commission for adoption. Whatever the outcome on timing, the work for the institutions affected starts well before that.
The shift from an accounting to a treasury perspective in encumbrance reporting is likely to be the most demanding part, since it requires data sources to be remapped and the set of entities in scope redetermined. Institutions that work through this methodically should find the transition to mandatory reporting considerably easier than those that wait for the final standards.
We are supporting institutions through exactly this sequence — scoping the entity perimeter, mapping AE fields to existing treasury and accounting sources, and testing what current models can actually produce for C 66.02. The earlier that work starts, the fewer surprises the final standards hold.
Further information on the changes to the EBA requirements for banks’ liquidity reporting and asset encumbrance can be found in our brochure: