Company: BBVXF
Filing Date: 2025-03-21
Form Type: 6-K
Source: 0000842180-25-000016
Chunk: 11

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-03-21
Form: 6-K
Chunk 11
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 implementation of the reform of the Basel III framework in Europe, the final versions of the so-called banking package, containing the reform of the Capital Requirements Regulation 4 (CRR III) and the Capital Requirements Directive 5 (CRD VI), were published in the Official Journal of the European Union (OJEU) on June 19, 2024.

The CRR III will apply from January 1, 2025, except for certain articles mostly related to European Banking Authority (EBA) mandates, which took effect earlier (July 2024), and the market risk component, whose implementation has been postponed by one year. Regarding CRD VI, European Union (EU) member states have 18 months to incorporate the Directive into their national legislation, after which CRD VI will take effect on January 2026.

On specific areas of the regulatory package, it is worth noting that in the market risk section, the European Commission (EC) has activated the delegated act under Article 461a of CRR III to delay the implementation of the new FRTB (Fundamental Review of the Trading Book) framework until January 2026 as a capital requirement. Additionally, concerning crypto-asset provisions, the banking package introduced a transitional prudential treatment for these exposures. A new legislative

proposal for permanent prudential treatment is expected to be presented by June 30, 2025.

For the implementation of the aforementioned regulatory package, the EBA has around 140 mandates from CRR III and CRD VI to develop Level 2 and Level 3 legislation (RTS, ITS, and guidelines) to facilitate the application of the regulations. Of particular importance is the EBA's final report on the Implementing Technical Standards (ITS) for entity disclosures, which were approved by the Commission and published in the OJEU as a Regulation at the end of December, and which include changes to the Pillar 3 framework. These changes encompass new and revised disclosure requirements for the output floor, crypto-assets (transitional treatment to be replaced by a definitive one before mid-2025, including review by the BCBS), credit valuation adjustment (CVA) risk, credit risk, market risk, and operational risk, as well as minor modifications to the leverage ratio. These ITS will apply from January 1, 2025. Moreover, the EBA has already published several consultations in 2024 regarding credit risk (off-balance-sheet items, default definition, etc.), market risk, operational risk, sustainability, and