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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

Other items

Does the approach specified in Article 134(5) CRR regarding the risk weight to be applied to assets purchased on a forward basis also apply to assets sold on a forward basis?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2935
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 21/04/2017

Contingent liabilities within the Merchant Services Industry

Does the contingent liability to which an acquiring bank is subject in the course of the merchant acquirer business qualify as an off-balance sheet item according to Annex I  CRR? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2916
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 30/06/2017

Obligation to carry out analysis and to consult with EBA on planned increase of risk weights before RTS on this matter are finally adopted and published in the Official Journal of the European Union

Is there an obligation to carry out appropriate analysis and to consult with EBA on planned increase of risk weights since RTS on this matter are not finally adopted and published in the Official Journal of the European Union?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2894
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 17/02/2017

Standardised approach risk weighting

In the scenario below, if the repayment of a retail depends on the client's business (and not the performance of the property), could a loan secured by immovable commercial property have a higher RW than a similar loan which is unsecured?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2891
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Rating of subsidiaries

Is “separately rated” in Article 172(1)(d) to be interpreted as “rated on individual information” or as ”having own rating based on a separate rating process”? Alternatively put: How is “separately rated” in Article 172(1)(d) to be interpreted?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2864
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Items associated with particular high risk

Does the term "investments" in letters (a) investments in venture capital firms, (b) investments in AIFs (...) and (c) investments in private equity include only exposures in the form of shares or units in (equity of) venture capital firms, AIFs, and private equity, or it is related to all forms of exposures (e.g. debt and equity instruments, units and shares in CIUs, etc.)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2845
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Treatment of irrevocable payment commitments according to Article 103(3) BRRD

How should payment commitments pursuant to Article 103(3) BRRD (Directive 2014/59/EU) be treated in the capital requirements for credit risk?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2831
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Assignment of exposures to exposure class of Public Sector Entities

Can only the entities having legal forms of non-profit associations and foundations qualify as PSE-s and be assigned to exposure class of PSEs, or could PSEs also include legal forms of either public or private limited liability companies, which are either owned by or set up and sponsored by central governments, regional governments or local authorities and are under public supervision?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2811
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Treatment of negative accrued interests in the credit risk

Do negative accrued interests reduce the exposure value, whereas positive accrued interests increase the exposure value?In particular, are negative accrued interests deducted from CET1 and should a reduction be done, if the negative accrued interests are already included in the retained earnings, according to article 26(1)(c), or in the losses for the current financial year, according to Article 36 (1) a of CRR?

  • 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_2795
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 31/03/2017

Treatment of exposures to non-EU equivalent investment firms, non-EU equivalent credit institutions and non-EU equivalent exchanges.

1. With reference to EBA Q&A 677, what is the regulatory basis/rationale in your decision to treat a non-EU equivalent third country exposure to recognised exchange as an exposure to a corporate? Please reference the CRR/ Single RuleBook in your response.2. Does the treatment describer in Q&A 677 or non-EU equivalent recognised exchanges also apply to exposures to non-EU equivalent investment firms and non-EU equivalent credit institutions so that they will also be treated as exposures to corporates? Please reference the CRR/ Single RuleBook in your response.3. Should these exposures be reported (C07 CRSA) in the exposure classes Institutions or Corporates?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2739
  • Topic: Credit risk
  • Date of submission:

Monitoring and evaluation of mortgages in cases of portfolio-wholesale transactions

Is it possible to assign the preferential risk weight of 35% according to Article 125 (1) (a) of Regulation (EU) No 575/2013 (CRR) to exposures that have been purchased at a wholesale price based on a) samples as to whether the conditions laid down in Art 208 and 229 CRR are fulfilled and b) a warranty guaranteeing full compensation in case any of these exposures default?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2726
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 17/03/2017

Classifications of loans to SPVs as to SME

How should the repayment of loans to SPV's (classified as SME) be considered for the purpose of Article 501 of Regulation (EU) No 575/2013 (CRR)? Should the original exposure amount be taken into account? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2711
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 11/11/2016

Application of Article 159 on the level of total own funds

Can the excess of provisions for non-defaulted exposures be used to cover the shortfall of provisions on defaulted exposures?On the reporting side, which of the two options is the correct way for the own funds reporting (C 04.00) in the following case?Option 1 – netting in C.01.00 row 380 “(-) IRB shortfall of credit risk adjustments to expected losses“ – (1000) row 910 „IRB Excess of provisions over expected losses eligible“ – 600 Effect to the total capital – minus 400Option 2 – no netting at all (no recognition of any excess because it is on defaulted exposures) row 380 “(-) IRB shortfall of credit risk adjustments to expected losses“ – (1000) row 910 „IRB Excess of provisions over expected losses eligible“ – 0 Effect to total capital – minus 1000 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2702
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 10/03/2017

ECAI ratings

1) For the determination of the risk-weight applicable to an exposure, is a “Bank Deposit Rating” an issue rating as per Article 139 of the CRR? 2) For the determination of the risk-weight applicable to an exposure, should a “Bank Deposit Rating” be used instead of an “Issuer rating” for exposures to institutions which are in the form of deposits (i.e. bank deposits)? What would be the treatment in accordance with Article 139 of the CRR?3) For instance, which Moody’s rating should be used to risk-weight an exposure to an institution which is in the form of a deposit (i.e. bank deposit): - the “Issuer Rating”? - the “Bank Deposit Rating”? - the “Obligation rating”? - one of the other ratings described in Moody’s methodology? Similar considerations apply to ratings issued by other ECAIs.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2698
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 24/02/2017

Computation of discount for purchased assets

How does the treatment described in the last subparagraph of Article 166(1) CRR interact with that of Article 159 CRR? How does the definition of discount/premium apply in prudential treatment of exposures?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2691
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 21/07/2017

Definition of “effective procedures” to monitor that the property taken as credit protection is adequately insured against the risk of damage.

What are the minimal criteria of adequate insurance of property against the risk of damage that the "procedures" should consist of in order to be assessed as effective?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2685
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 24/06/2016

Meaning of "credit lines" in the context of conversion factors for certain off-balance sheet items

Which types of off-balance sheet exposures are referred to by the term “other credit lines” in Article 166(8)(d) CRR? Specific clarification is requested (i) for long-term letters of credit arising from the movement of goods, as only such short-term letters are mentioned in Article 166 (8)(b) CRR, and (ii) for guarantees.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2663
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 20/01/2017

Risk weight for exposures to central-government-risk PSEs with an original maturity of 3 months or less, which are denominated in foreign currency

May exposures to PSEs established in a Member State, whose level of risk in the opinion of the competent authority of the Member State in question does not differ from the level of risk of the central government, be assigned a risk weight of 20% in accordance with Article 116(3) CRR if they are denominated in foreign currency?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2646
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Risk weighting under the Standardised Approach for credit risk for an exposure secured by a mortgage on a residential property which is a second home (for instance, a holiday home).

Can a second home be a residential property under Article 4(75) of Regulation (EU) No 575/2013 (CRR) and thus a respective mortgage benefit from the 35% risk weight under article 125(1)(a)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2641
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/01/2017

Relevant competent authority to determine the same risk weight treatment as the central government

Who is the relevant competent authority to determine if the same treatment of regional government exposure and central government exposure can be applied? The national supervisor, the European Commission or the ECB?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2637
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022