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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

Risk weight for exposures to unrated institutions

Does Article 121 allow unrated institutions to be assigned government ratings only in the case of a government guarantee for the deposits of that bank? Additionally, does Article 121(3) apply to unrated institutions as well? Does it say that if we have a cash balance in an unrated bank we should assign a risk weight of 20%?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1869
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 11/12/2015

CR IRB template – inclusion of haircut exposure value

In what column of the Credit Risk IRB templates shall the increase of the exposure value by the haircut exposure value be reported (in column 090, in column 110 or just in column 255 and 260)?

  • 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Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)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: 2015_1868
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as final Q&A: 24/07/2020

Disclosure of the Leverage Ratio

How shall institutions disclose the Leverage Ratio as set out in Art. 451 CRR and the Delegated Regulation (EU) 2015/62, entered into force on the 18 January 2015, while there is no adopted ITS on Disclosure until now?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1863
  • Topic: Leverage ratio
  • Date of submission:
  • Published as final Q&A: 12/06/2015

Removal of Senior Management

We would like clarification on Article 28 of Directive 2014/59/EU (BRRD) envisaging the possibility to remove the senior management and also with regard to individuals. This seems the same power that is already envisaged in Article 27(1)(d) providing for the removal of managers that are unfit to perform their duties albeit linked to a different trigger; therefore different triggers could end up with the same early intervention measures.

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1862
  • Topic: Early intervention
  • Date of submission:
  • Published as final Q&A: 17/04/2015

Counterparty credit risk add-on for repurchase transactions

Is it required to calculate and report this counterparty credit risk add-on also for cash borrowers in repo transactions or for the borrowers in securities lending transactions?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1861
  • Topic: Leverage ratio
  • Date of submission:
  • Published as final Q&A: 10/07/2015

When should an external rating be considered as a primary factor determining an internal rating assignment

Concerning the practical application of the RTS on materiality: When should an external rating be considered as a 'primary factor' determining an internal rating assignment, and by what measure is the relative importance of the different variables comprising an internal model for credit risk to be evaluated?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 529/2014 - RTS on materiality of extensions and changes in the advanced approaches (IRB and AMA)
  • ID: 2015_1859
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 19/06/2015

Requirements for financial collateral (Covered Bonds)

Article 207(2)(2) states that "Securities issued by the obligor, or any related group entity, shall not qualify as eligible collateral. This notwithstanding, the obligor's own issues of covered bonds falling within the terms of Article 129 qualify as eligible collateral when they are posted as collateral for a repurchase transaction, provided that they comply with the condition set out in the first subparagraph". Whereas the first sentence includes securities issued by "any related group entity", the second sentence which acts as the carve out, omits such securities. Is this an intended ommission?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1858
  • Topic: Securitisation and Covered Bonds
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Other Asset

Should all the accounting based off-settings (here including for example tax assets/ liabilities off-setting) be grossed-up on Other Asset of LR exposure?

  • 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: 2015_1856
  • Topic: Supervisory reporting - Leverage ratio
  • Date of submission:
  • Published as final Q&A: 04/10/2019

Reporting of secured lending if an institution has no possession of the collateral

Does a loan qualify as collateralised lending if the collateral has been pledged by the debtor, but the bank can only use the collateral in the event of a default of the customer or should loans only be seen as collateralised lending if the bank is in possession of the collateral (meaning the collateral is included in the bank’s balance sheet)? What does collateralised by collateral that qualifies as a liquid asset mean? Does it mean that the bank has reported the collateral as High Quality Liquid Assets (HQLA) in the LCR, or does it mean that if the bank will call the collateral in case of a default of the debtor the bank can than report that gained collateral as HQLA?

  • 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: 2015_1855
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 26/06/2015

Reporting of the Transactions where cash transfers does not occur

We would like to know in cases of transactions wherein stocks/securities are exchanged e.d Stock borrowing and Lending(SBL) transactions , how the stock encumbered and matching liabilities should be reported.

  • 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: 2015_1852
  • Topic: Supervisory reporting - Asset Encumbrance
  • Date of submission:
  • Published as final Q&A: 04/06/2021

Subordinated loans as Additional Tier 1 capital

Is it possible for a (normal) subordinated loan to qualify as Additional Tier 1 capital according to Article 51 of Regulation (EU) No 575/2013 if all conditions according to Article 52 are met?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 241/2014 - RTS for Own Funds requirements for institutions
  • ID: 2015_1846
  • Topic: Own funds
  • Date of submission:

F 12.00 - changes of counterparty sector

In FINREP template F 12.00 movements in allowances for credit losses in the current year are reported taking into account the credit loss assessment method and the relevant counterparty sector. It is possible that the counterparty sector changes within the reporting time frame (i.e. from the date of the opening balance in column 010 to the reporting date, that is the date of closing balance in column 070). If this is the case, does the reporting institution take into account the counterparty sector as at the reporting date? Or are such changes reported in column 060 Other adjustments?

  • 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: 2015_1844
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 13/12/2019

Disclosure requirement

What is the scope, in terms of risk types, of the disclosure requirement under Title VII, paragraph 23b); specifically, does it include Counterparty Credit Risk?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2014/14 - Guidelines on materiality, proprietary, confidentiality and disclosure frequency under Pillar 3
  • ID: 2015_1843
  • Topic: Transparency and Pillar 3
  • Date of submission:

FORBERANCE CLASSIFICATION

For forborne exposures under probation which, at the time of the initial concession, were performing, if a new measure is granted after 1 year and a half, during which the client has fulfilled points c) and d) of standard 176 when it is still within the probation period, and if the bank, on the basis of its own independent evaluation, does not reclassify the client (see Q&A EBA 2013_618 and 2014_736), is the period of 2 years for exiting the probation period counted again from scratch?Nel caso di una esposizione forbone under probation, che nel momento della prima concessione era performing, se una nuova misura viene concessa dopo 1 anno e mezzo durante il quale il cliente ha rispettato i punti c) e d) dello standard 176, quando è ancora in vigore il periodo probatorio, e se la banca in virtù della propria autonoma valutazione non riclassifica il cliente (vedi Q&A EBA 2013_618 e 2014_736) il conteggio dei 2 anni per l’uscita dal periodo probatorio, riparte da zero?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions
  • ID: 2015_1842
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 19/03/2021

FORBORNE PERFORMING/CLASSIFICAZIONE CLIENTE - FORBORNE PERFORMING / CLIENT CLASSIFICATION

Since the concession of more favourable conditions as part of commercial practice is not comparable to a forbearance measure, if, during the probation period, the client (forborne performing), once their situation has returned to normality after largely overcoming potential ‘difficulties’, were to request an adjustment of the conditions in line with other competing banks, if the bank met the request for obvious reasons of expediency, would it then be forced to reclassify the client?Posto che la concessione di condizioni più favorevoli, rientranti nella prassi commerciale, non è equiparabile ad una misura di forberance, se nel periodo probatorio il cliente (forborne performing), tornato in condizioni di piena regolarità avendo ampiamente superato potenziali “difficoltà”, richiedesse un adeguamento delle condizioni rispetto ad altre banche concorrenti, a fronte della adesione della banca alla richiesta per evidenti ragioni di opportunità, la stessa si vedrebbe quindi costretta a ri-classificare il cliente?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions
  • ID: 2015_1841
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 13/12/2019

Treatment of ‘short-term’ exposures - Trattamento delle esposizioni a “breve termine"

With regard to short-term exposures involving renegotiations triggered by financial difficulties of the debtor – hence forborne – we ask that the deadline after which the anomalies and subsequent modifications in use must be considered for forborne purposes (past due invoices not paid by a certain date, tied-up amounts, time given for covering outstanding claims, etc.) be established objectively beforehand.Con riferimento alle esposizioni a breve termine in presenza di rinegoziazioni dovute a difficoltà finanziarie del debitore e dunque forborne si chiede di stabilire in modo oggettivo e predeterminato la tempistica oltre la quale le anomalie e le successive modifiche di utilizzo devono essere considerate ai fini forborne (fatture scadute e non rimborsate oltre una certa data, importi immobilizzati, tempi per la copertura degli insoluti ecc.).

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions
  • ID: 2015_1839
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 13/12/2019

Forbearance of Non-performing Exposures

A clarification regarding the scope of application for forbearance of Non-performing Exposures is required.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions
  • ID: 2015_1838
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 13/12/2019

Offset of Additional Value Adjustments (“AVA”) against Expected Loss (“EL”) under Article 159

Could the EBA advise whether the reference to “provisions” within the answer to Q&A 2014_933 and 2014_950 refers to specific credit risk adjustments (“SCRAs”)? If so, could the EBA advise if there are any restrictions to the application of AVA against EL as the existing text and level 1 text could be read that any AVA on an IRB exposure would be eligible for offset under Article 159.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1835
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 20/01/2017