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Q&As refer to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.

Please note that the Q&As related to the supervisory benchmarking exercises have been moved to the dedicated handbook page. You can submit Q&As on this topic here.

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List of Q&A's

Netting set treatment for trades with Specific Wrong Way Risk

For a netting set with three OTC derivative trades (trades A, B and C), Trade A is identified existing Specific Wrong-Way Risk. The underlying collateral was assigned in trade level, namely collateral 1, 2 and 3 allocated to trade A, B and C respectively. When removing trade A from the netting set and treated as a separate netting set, shall the underlying collateral be considered?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2590
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 18/11/2016

Reporting of assets sold short as a additional outflow for LCR under Delegated Act

For the purposes of reporting additional outflow for short positions in the LCR (row ID 1.1.45.6.2) on the C73 return, are firms required to report both unsettled and settled uncovered sold short positions?  

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement
  • ID: 2016_2585
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 08/02/2019

Two separate ex-ante valuations for resolution purposes

In case two separate ex-ante valuations for resolution purposes have been prepared, each of which covering different purposes as per Article 36(4) of Directive 2014/59/EU (BRRD), shall both be treated as a part of the valuation and, therefore, the decision on resolution? Should they both be subjected to judicial review in line with Articles 36(13) and 85 BRRD?On a related note, can a resolution authority's decision be appealed if it does not include a decision on a specific resolution action to be taken?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2584
  • Topic: Valuation
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Use of valuation to apply resolution tools and to initiate resolution

Why is valuation part of the decision on application of resolution tools instead of the decision initiating resolution?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2583
  • Topic: Valuation
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Difference between the two references in Articles 23(1)(d) and 19(5)(b)

Could you please provide additional clarifications on why there is a difference between the two references mentioned below (between Article 23(1)(d) and 19(5)(b)) and also on what is meant by “form of security” in Article 23 (1)(d)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2582
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 05/02/2016

Interpretation of Article 19(2)

Chapter III of Directive 2014/59/EU (BRRD) does not apply to intra-group financial arrangements including funding arrangements and the operation of centralised funding arrangements provided that none of the parties to such arrangements meets the conditions for early intervention. In our opinion this means that in the moment when one member of centralised funding arrangement meets conditions for early intervention the Chapter III of Title II (i.e. the chapter which regulates Intra Group Financial Support) starts to apply to the centralised funding arrangement. From that moment providing any intragroup financing to the member which meets the conditions for early intervention is only possible if, inter alia: - • conditions set by Article 23 BRRD are met and • providing of such financing is notified to the supervisory authority and approved by that authority as required by Article 25 BRRD. Is our understanding correct?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2581
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 05/02/2016

Amendments to Article 19

Could you please clarify Article 19(1) and (2) of Directive 2014/59/EU (BRRD)? The words “that meets the conditions for early intervention pursuant to Article 27” in Article 19(1) were added to the original draft of the BRRD), in addition to the insertion of Article 19 (2), which provides that the Intra Group Financial Support (IGFS) chapter does not apply if ”none of the parties” meets the conditions of early intervention. The addition to the original draft refers to “arrangements” rather than “agreements”. We understand “arrangements” to be broader, and to refer to arrangements of any kind. Only a subset of these, called ”group financial support agreements” are regulated by the BRRD. Does this variation in terminology affect implementation?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2579
  • Topic: Early intervention
  • Date of submission:
  • Published as final Q&A: 05/02/2016

Branches of institutions that are established outside the Union

Does the notion of “branches of institutions that are established outside the Union” according to Article 1(1)(e) of Directive 2014/59/EU (BRRD) refer to Union branches of third-country institutions?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2578
  • Topic: Other topics
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Reporting of outflows and Inflows arising from secured lending transaction where collateral is not Level 1, Level 2A and Level 2B asset on DA LCR templates C 73.00 and C 74.00

On which rows of the liquidity coverage templates C 73.00  - Outflows and C 74.00 - Inflows should firms report flows arising from secured lending transaction where collateral is not Level 1, Level 2A and Level 2B asset and therefore non-liquid asset. ANNEX XXV – REPORTING ON LIQUIDITY (PART 2 OUTFLOWS) and ANNEX XXV – REPORTING ON LIQUIDITY (PART 3: INFLOWS) state that ‘Credit institutions shall only report the Level 1, Level 2A and Level 2B assets that qualify as liquid assets in accordance with Title II of Commission Delegated Regulation (EU) 2015/61. Where collateral is Level 1, Level 2A or Level 2B but does not qualify as liquid asset in accordance with Title II of Commission Delegated Regulation (EU) 2015/61 it shall be reported as non-liquid.’Therefore are firms not required to report flows arising from secured lending transaction where collateral is non Level 1, Level 2A and Level 2B asset in section ID 1.2 of the C 73.00  and C 74.00 on the rows for collateral that does not qualify as a liquid asset? The specific remark regarding secured lending and capital market-driven transactions on ANNEX XXV – REPORTING ON LIQUIDITY (PART 3 INFLOWS) 1.2 (3) is ambiguous when viewed in conjunction with the decision tree guidance for reporting assets and liabilities from secured lending which states ‘Allocate into one relevant item of ID 1.2’.If firms are not required to report flows arising from secured lending transaction where collateral is non Level 1, Level 2A and Level 2B asset in section ID 1.2 of the C 73.00  and C 74.00 where should they be reported? We assume they must be reported somewhere as they contribute to the firms’ net liquidity outflow, but to report these flows in section 1.2 can distort the numerator calculation on row 090 of C 76.00.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2016_2576
  • Topic: Supervisory reporting - Liquidity (LCR, NSFR, AMM)
  • Date of submission:
  • Published as final Q&A: 04/08/2017

Assigning Specific Credit Risk Adjustments for a group of exposures to the exposures within the group

Following question 2013_499, could you confirm that this implies that the collective provisions allocated to specific portfolios for accounting purposes (FINREP) will agree at aggregate level with the amounts booked in the financial statements but the allocation for RWA to single exposures will differ from the allocation for accounting purposes to single exposures and thus a single exposure will show a different collective provision for accounting purposes (FINREP) than that for RWA?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 183/2014 - RTS for the calculation of specific and general credit risk adjustments
  • ID: 2016_2574
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 18/11/2016

Two validation rules on "Treasury shares" no more available considering the cancellation of another validation rule on the same matter

Why validation rules  v2060_s (for FINREP F01.03, rows 240,260, col 010) and v2061_s (for FINREP F17.03, rows 340,360, col 010), asking for negative value are still active while the n° v2028_s (for FINREP F46.00, rows 010,040,210, col 090,110), for same value as the 2 precedent controls, asking for negative value too, has been deleted in the version 2.3

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2016_2573
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 13/12/2019

Own funds requirements for non-continuous options which are perfectly matched

If a bank transacts in 2 back-to-back non-continuous options so that there is no residual market risk, is there a requirement that each transaction is separately capitalised as is implied by the Regulation. If netting is not allowed this will lead to a significant own funds requirement for what is in effect a zero market risk position, particularly given the treatment of short options positions where a maximum payout is not specified?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 528/2014 - RTS on non-delta risk of options in the standardised market risk approach
  • ID: 2016_2571
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 11/11/2016

Cash variation margin received in the same currency of settlement of the derivative contract

Second sub para. of Art. 429a(3) of the leverage ratio Delegated Regulation indicates that: "For the purposes of point (c) of the first subparagraph, where the derivative contract is subject to a qualifying master netting agreement, the currency of settlement means any currency of settlement specified in the derivative contract, the governing qualifying master netting agreement or the credit support annex to the qualifying master netting agreement.” As "currency of settlement" is not sufficiently specified and differs from standard market documentation terminology, we we would request to provide further explanation on the interpretation of “currency of settlement”.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/62 - DR with regard to the leverage ratio
  • ID: 2016_2570
  • Topic: Leverage ratio
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Reporting of ECB LTRO in table 2A2 (P 02.02) and validation rule v4135_m

Should ECB LTRO transactions be strictly reported in table P 02.02 in row 010 as a repo transaction?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2014/04 - Guidelines on harmonised definitions and templates for funding plans of credit institutions - repealed by EBA/GL/2019/05
  • ID: 2016_2569
  • Topic: Supervisory reporting - Funding Plans
  • Date of submission:
  • Published as final Q&A: 28/07/2017

Reporting of funding, obtained to supply credit to the real economy, and validation rule v4137_m

Should in table P 02.02, row 030, only the obligations be reported, which arise through the issuance of debt securities or is the reporting of loans from multilateral financial institutions and public financial institutions expected as well?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2014/04 - Guidelines on harmonised definitions and templates for funding plans of credit institutions - repealed by EBA/GL/2019/05
  • ID: 2016_2568
  • Topic: Supervisory reporting - Funding Plans
  • Date of submission:
  • Published as final Q&A: 15/06/2018

Power of the resolution authority to transfer back

How should the transfer back procedure be applied in the context of the sale of business tool?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2565
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Clarification on Article 36(6)(a)

How should the term "updated” referred to in Article 36(6)(a) of Directive 2014/59/EU (BRRD) be interpreted?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2564
  • Topic: Valuation
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Intra-group financial support consideration

According to Article 23 Directive 2014/59/EU (BRRD), the intra-group financial support may be granted if there is a reasonably prospect that the beneficiary party pay the consideration. Should this consideration only take a pecuniary form?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2563
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 05/02/2016

Recovery plans for subsidiaries that are not institutions

Can the requirement to draw up and submit an individual recovery plan under Article 7(2) of Directive 2014/59/EU (BRRD) be imposed upon subsidiaries that are not institutions (e.g. financial institution, financial holding company)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2562
  • Topic: Recovery plans
  • Date of submission:
  • Published as final Q&A: 28/01/2022

Benchmarking

With regard to Annex I - C 103.00 we see that EBA requires data that the bank already reports regularly via COREP. For some of them, we see a so-called legal reference. Examples: 22 120 13 Collateral Value 22 140 13 Maturity 22 160 13 Provisions non-performing exposures The question is: do we comply to the EBA Benchmark requirements if we report equally to the regular COREP report? Or should we use these data and follow the legal reference to calculate it in a deviating way?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions (for benchmarking the internal approaches)
  • ID: 2016_2561
  • Topic: Supervisory reporting - Supervisory Benchmarking
  • Date of submission: