Single Rulebook Q&A

Question ID: 2014_912
Legal act : Regulation (EU) No 575/2013 (CRR) as amended
Topic : Liquidity risk
Article: Article 421
Paragraph: Paragraph 3
Subparagraph:
COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
Article/Paragraph : -
Name of institution / submitter: BELFIUS BANK
Country of incorporation / residence: BELGIUM
Type of submitter: Credit institution
Subject matter : Deposits with higher outflows
Question:

Does the Article 7 of Part 2 (Title II) of the EBA Guidelines on retail deposits subject to different outflows for the purposes of liquidity reporting (risk factor "maturing fixed-term or notice period") also relate to the savings accounts and transactional sight accounts with no legal maturity or is this article targeting mainly term deposits and other term products with contractual notice period? If yes, does it mean that the part of deposits under Deposit Guarantee Scheme (Article 421(1) of Regulation (EU) No. 575/2013) from clients having more than 100.000 EUR is also subject to higher outflows of more than 10%, as the deposit has 2 risk factors (high value deposit and deposit with notice period?

Background on the question:

In the EBA Guidelines on retail deposits subject to different outflows for the purposes of liquidity reporting, one of the factors affecting the stability of deposits is the "maturing fixed-term or notice period deposit (Title II, Part 2 Article 7). A “mechanical reading” leads to include the savings/sight/transactional deposits but this means therefore that all those deposits have a Very High Risk factor of category 2 (Title II, Part 3 article 13.2). With one risk factor of category 2 in all cases, all such products can never be eligible for the first tiered bucket but, provided they fulfil any additional factor, will be eligible for bucket 2 or 3.

Date of submission: 06/03/2014
Published as Final Q&A: 27/04/2018
EBA answer:

The Guidelines on retail deposits subject to different outflows for purposes of liquidity reporting under Regulation (EU) No 575/2013 (CRR) were repealed as of 27 November 2017. The reference in the question to paragraph 7(1) of Part II (Title II) should be understood as referred to in Article 25(2)(d) of Commission Delegated Regulation (EU) 2015/61.

Deposits that have no maturity date, e.g. “open maturity deposits”, are excluded from the scope of Article 25(2)(d) if a notice period is also not specified or the notice period is 30 days or longer.

 

Note: This Q&A (originally published on 12 September 2014) has been amended on 27 April 2018 to reflect that the Guidelines on retail deposits subject to different outflows for purposes of liquidity reporting under Regulation (EU) No 575/2013 were repealed.

Previous answer:

Paragraph 7.1 of Part 2 (Title II) of the Guidelines on retail deposits subject to different outflows for purposes of liquidity reporting under Regulation (EU) No 575/2013 (CRR) includes as deposits to be considered as falling within the category of 'maturing fixed term or notice period deposits':

  1. deposits originally placed as fixed-term with an expiry date maturing within the 30-day period; or
  2. deposits with fixed notice periods shorter than 30 days, in accordance with contractual arrangements, other than those that qualify for the treatment provided for in Article 421(5).

Deposits that have no maturity date, e.g. "open maturity deposits", are excluded from the scope of that risk factor if a notice period is also not specified or the notice period is 30 days or longer.

This answer is without prejudice to further guidance which may be provided in the context of the delegated act on the liquidity coverage ratio.

 

Status: Final Q&A
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