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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

Definition of liquidity facility

Would it be acceptable from a regulatory point of view to use only the swingline portion of a facility (i.e. a loan to an entity to cover possible shortfalls from other debt commitments) as "liquidity facility"?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_506
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 20/06/2014

Description definitions

Rows 090 and 120 are both subsets of Loans and Advances. Row 090 is "of which: mortgage loans [Loans collateralized by immovable property]" and row 120 is "of which: lending for house purchase". What is the difference between these two rows?

  • 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Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)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: 2013_504
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 21/03/2014

Derogation from the application of liquidity requirements on an individual basis

Does compliance with the obligations laid down in Part Six include the concept of “phasing-in” of the LCR from 60% in 2015 to 100% in 2018 as defined in Part Nine in Article 460(2) of Regulation (EU) No. 575/2013, or is compliance with 100% LCR from 2015 onwards required?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_503
  • Topic: Liquidity risk
  • Date of submission:

Exemption from deduction of Equity Holdings in an insurance company from CET1

Pursuant to Article 471(1)(d) of Regulation (EU) No 575/2013 (CRR), in order not to deduct the equity investment in an insurance company, should “the amount of the equity holding which is “not deducted” not exceed (i) the “amount of shares” (13% share of the insurance company’s capital) or (ii) the “book value” (EUR 2 billion), held in the Common Equity Tier 1 instruments in the Insurance company as of December 31, 2012?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_502
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 04/07/2014

Calculating capital requirement for trading book positions - Derogation for small trading book business

According to article 94(1) of Regulation (EU) No 575/2013 (CRR), institutions which meet specific conditions are allowed to use an exception in calculating capital requirements considering trading book exposures. In letter (b) of abovementioned article it states that the size of institution's on- and off-balance sheet trading-book business should never exceed 6 % of total assets and EUR 20 million. It does not specify a time horizon for such an event. Should the institution calculate the trading-book business values starting from January 1st 2014 or from the day that it started their trading-book activity? For an example, if the institution’s trading-book business exceeded 6% of total assets only once on June 24 2013, could the derogation be applicable on January 2nd 2014? If not, for how long is the institution restricted from making use of the derogation specified in article 94(1)(b)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_500
  • Topic: Market risk
  • Date of submission:

Specific collective provisions allocation

In line with question 2013_201, how do we allocate any specific (to particular portfolios) collective provisions to various asset classes? a) do we follow the rules applied when calculating the specific collective provisions by the relevant department?; or b) can we allocate them to past-due exposures first and then to the all other exposures?

  • 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: 2013_499
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 16/05/2014

Format of NACE code to be reported (Annex IX, 5. LE1 template identification of the counterparty, instruction to column 060 NACE code)

Shall we report only the NACE code (e.g. F) or shall we report the NACE code together with the description (e.g. F - Construction)?

  • 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: 2013_493
  • Topic: Supervisory reporting - Large Exposures
  • Date of submission:
  • Published as final Q&A: 21/03/2014

Definition of a group of connected clients as 'institution' or 'unregulated financial entity'

How shall a group of connected clients be defined as 'institution' or 'unregulated financial entity'?

  • 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: 2013_492
  • Topic: Supervisory reporting - Large Exposures
  • Date of submission:
  • Published as final Q&A: 21/03/2014

Reporting of Collateral of Covered Bonds

In the template for the Covered Bonds Issuances, the collateral has to be reported separately for each CB. The respective bank, however, has one cover pool backing several issuances. Should this cover pool be broken down proportionally on each CB or is no breakdown 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: 2013_491
  • Topic: Supervisory reporting - Asset Encumbrance
  • Date of submission:
  • Published as final Q&A: 28/03/2014

Minority interests

Article 81(1) of Regulation (EU) No 575/2013 (CRR) defines minority interests which are part of CET-1 instruments where the sum of share premium accounts related to those instruments, retained earnings and other reserves are noted. On the other hand the other comprehensive income defined in Article 26(1)(d) of CRR is not noted in Article 81(1). Further, Article 84(1)(a) refers to the CET-1 capital of the respective subsidiary which means for us the other comprehensive income is part of the calculation. How does other comprehensive income have to be treated in case of calculation of the minority interests?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_487
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 07/11/2014

Cash Inflows with symmetrical weights

In Article 425(2)(e) of Regulation (EU) No 575/2013 (CRR) it states: "Monies due that the institution owing those monies treats in accordance with Article 422(3) and (4), shall be multiplied by a corresponding symmetrical inflow." Does this mean that assets stemming from cash management, clearing and custody services have to be treated with 5% and 25% factors, in case those factors are also applied to the corresponding deposits?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_486
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 04/04/2014

Cash Inflows excluded from inflow cap

Article 425(1) reads: “Capped inflows shall be the liquidity inflows limited to 75% of liquidity outflows. Institutions may exempt liquidity inflows from deposits placed with other institutions and qualifying for the treatments set out in Article 113(6) or (7) from this limit. Institutions may exempt liquidity inflows from monies due from borrowers and bond investors related to mortgage lending funded by bonds eligible for the treatment set out in Article 129(4), (5) or (6) or by bonds as referred to in Article 52(4) of Directive 2009/65/EC from this limit…” Is the interpretation correct that mortgages that are used as a cover pool for credit enhancing a covered bonds transaction can be excluded from the inflow cap? In contrast to the original Basel III papers it is not possible to identify the definition of the general provision, capping inflows at 75% of cash outflows. Is the inflow cap applicable to every item in the template or at the calculation of the summed amounts?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_485
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 28/03/2014

Supervisory Reporting requirements of branches in host countries

What supervisory reporting requirements apply for branches of credit institutions authorised in another member state or a third country in their host country? (for example a branch of a German bank in Austria).

  • 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: 2013_484
  • Topic: Supervisory reporting - Other
  • Date of submission:
  • Published as final Q&A: 27/06/2014

Methods for prudential consolidation

What is the meaning of the last sentence of Article 18 of Regulation (EU) No 575/2013 (CRR)? Does it mean that the method of prudential consolidation (paragraphs 3 to 6 and 9) is not available for institutions that have to apply Part Six on the basis of their consolidated situation?When do institutions have to apply Part Six on the basis of their consolidated situation – is this only according to Article 11 of CRR or also in case of application for a liquidity sub-group according to Article 8 CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_483
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 04/04/2014

Under the large exposure regime Article 390 (6)(e) of CRR provides an exemption for deduction of items according to article 36, 56 and 66. These deducted items must not be considered in the large exposure regime.

Is it correct that deducted equity exposures do not need to be reported in the solvency regime as well (=same procedure as in Large Exposure regime) or do they have to be reported in asset class “equity exposures” with a risk weight of 0%?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_482
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 19/09/2014

Cash Inflows from major index equity instruments

Article 425(2)(f) of Regulation (EU) No 575/2013 (CRR) states "Monies due from positions in major index equity instruments provided there is no double counting with liquid assets". Which cash flows are included in this definition? Is it referred to monies due from expected dividends?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_481
  • Topic: Liquidity risk
  • Date of submission:

Cash outflows on other liabilities

What are the general mandatory requirements for clearing, custody and cash management deposits for the beneficial run-off factors of 5%(with deposit insurance scheme) and 25%(without deposit insurance) respectively? How can it be proved that a client is compromised in its operational functioning upon withdrawal of funds within the 30 day horizon? Can you give us an example?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_480
  • Topic: Liquidity risk
  • Date of submission:

Stand By Credit Facilities as Liquid Assets

In Article 416(1) of Regulation (EU) No. 575/2013 states: “Institutions shall report the following as liquid assets unless excluded by paragraph 2 and only if the liquid assets fulfil the conditions in paragraph 3: … e) standby credit facilities granted by central banks within the scope of monetary policy to the extent that these facilities are not collateralised by liquid assets and excluding emergency liquidity assistance;” Which real world examples exist for standby credit facilities, which are not collateralized by liquid assets, but at the same time fulfil the prerequisite of paragraph 3? Would the unused amount for potential ECB tender transactions which are not collateralised by liquid assets, as defined in the CRR, qualify for a standby credit facility?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_476
  • Topic: Liquidity risk
  • Date of submission:

Determination of clearing threshold of non-financial counterparties

Who decides if a non-financial counterparty exceeds a clearing threshold and therefore has to be included in the CVA calculation? Is this the responsibility of the counterparty? Is this only relevant for counterparties in third countries or also for counterparties in member states?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_472
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 11/04/2014