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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 subordinated exposures

What is the definition for subordinated exposures within the context of article 161?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3296
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Unfunded credit risk mitigation for specialised lending exposures

How should RWA be calculated for unfunded credit risk mitigation when the protected exposure is a specialised lending exposure in respect of which an institution is not able to estimate PDs and used the risk weights in Article 153(5) CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3295
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 07/05/2021

Appropriate Risk Weight for purchased defaulted assets

Where an entity subject to the CRR purchased Non-Performing Loans booked at the purchase price (net book value, “NBV”), which is significantly below the loans’ gross book value (“GBV”), can the difference between GBV and NBV be treated as specific credit risk adjustment when deciding whether a risk weight of 100% (rather than 150%) applies according to Article 127 CRR?

  • 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: 2017_3270
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 21/09/2018

Risk weight for the credit risk for third countries with supervisory and regulatory arrangements at least equivalent to those applied in the Union according to Article 114(7) CRR

If a third country has supervisory and regulatory arrangements at least equivalent to those applied in the Union (such as Turkey) what risk weight for the credit risk is assigned to the exposure of this country?For example, when the Turkish competent authority assigns a 0% risk weight to the credit risk of Turkey, can this risk weight be used by a German bank? What happens when Turkey issued bonds in EUR, USD, JPY and TKY? How is the difference in the risk weight in the case the Turkish competent authority assigns a 0% risk weight to all bonds?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3262
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 22/09/2017

Application of a Permanent Partial Use exemption under Article 150(1)(d) to the European Commission

Does the permanent partial use exemption under Article 150(1)(d) of CRR encompass European organisations such as the European Commission? Does the permanent partial use exemption under Article 150(1)(d) of CRR encompass European organisations such as the European Commission?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3256
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

CCF for uncommitted lines

Can uncommitted guarantee/letter of credit lines be classified as low risk under Annex I, point 4 letter (c) CRR? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3246
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 24/11/2017

Risk weight to apply to exposures to unrated central banks

What risk weight should be assigned to exposures to the central bank of a non EU-member country when the central bank does not have a credit assessment by a nominated ECAI (i.e., it is unrated)? Would it be appropriate to assign a risk weight of 100% to exposures to said central bank, independently of the rating of the central government?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3231
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 14/07/2017

Application of IRB floor

How should the IRB floor requirement, stemming from Article 500 CRR (transitory Basel I floor), be applied in case of an IRB institution that uses standardised method (after regulator’s approval) as an alternative to Basel I floor in the situation when 80 % of the total minimum amount of own funds calculated under standardised method (SA) is higher than the own funds calculated under IRB approach?Is the institution in such circumstances obliged to recognise an additional capital (own fund) requirement, resulting from the difference between the floor value based on STA and the actual own funds calculated under IRB capital requirements, directly in its capital adequacy ratio (the positive difference between 80% of STA RWA and IRB RWA to be added to denominator of capital adequacy ratio calculation)?Or rather the IRB bank is only obliged to ensure that it holds own funds at the level which is more or equal to the 80% of the total minimum amount of own funds as required under Basel I (or STA under Basel II, after regulator’s approval), i.e. the level of own funds is sufficient for covering the IRB floor requirement of Art. 500 CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3227
  • Topic: Credit risk
  • Date of submission:

Risk weight of EURATOM debt

Which risk weight shall apply to outstanding/new EURATOM debt instruments?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3204
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 14/07/2017

Application of the definition of ‘speculative immovable property financing’ under the Standardised Approach

In case the borrower is the developer of a real estate project for which future contract agreements with future owners have been signed about the properties under development, would this exposure fall within the scope of the speculative immovable property financing?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3173
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 21/09/2018

Documentary credits in which underlying shipment acts as collateral and other self-liquidating transactions

Does a documentary credit secured by an assignment, assignment for security and/or pledge of the underlying sales contracts with payment to be effected to an account pledged in favour of either the lender (i.e. L/C issuing bank) or the security agent (especially in case of a syndicate) satisfy the condition of Annex 1 (3) (a) (i) CRR that “the underlying shipment acts as collateral or that the transaction is otherwise self-liquidating”?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3171
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/10/2017

Capital requirements for regular-way transactions during the settlement cycle

How shall regular-way transactions be treated during the settlement cycle, in particular where the settlement cycle is shorter than for long settlement transactions? Is the treatment of such pending settlement transactions different for trade date accounting vs. settlement date accounting?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3155
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Speculative immovable property financing

Should the loans that banks grants to build a first home, as a part of the normal business process, where the repayment of the financing comes from the sale of the property to the first buyer, without a speculative purpose of resale, and on the basis of the credit risk valuation of the borrower’s financial strength, be considered as speculative immovable property financing under Article 4(1)(79) CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3131
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 30/06/2017

Valuation of immovable property performed by statistical model

Does the reference to the independent valuer in Article 229(1) and Article 208(3)(b) of Regulation (EU) No 575/2013 (CRR), permit the recognition of a statistical model of property valuation, the outcomes of which are periodically verified by other independent valuer, as independent valuer?Does the reference to the independent valuer in Article 229(1) and Article 208(3)(b) CRR permit that before a credit decision, a property would be evaluated by a statistical model, the outcomes of which are periodically verified by another independent valuer, without additional confirmation by an independent valuer for each property valuation made by a model?Does the reference to the independent valuer in Article 229(1) and Article 208(3)(b) CRR permit that before a credit decision, a property would be evaluated by a statistical model, where outcomes of a model are periodically verified by another independent valuer, and there is an additional confirmation or correction for the each statistical valuation, after a credit decision by another independent valuer? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3078
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 12/05/2017

Multiplier of 1.25 to the asset value correlation

In case of an exposure to a regulated financial sector entity which does not meet the requirements to be treated like a large financial sector entity (with total assets of less than 70 billion of euros), but which is owned by a regulated large financial sector entity which meets those requirements, does the multiplier of 1.25 to the asset value correlation apply for that exposure?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_3057
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 08/06/2018

Use of bona fide estimates for the determination of the size of a corporation

Is it allowed to use bona fide estimates for the determination of the size of a corporation for the purposes of Articles 153(4) or 162(4) CRR (identification of SMEs) analogous to Article 4(3) of the Annex Commission Recommendation 2003/361/EC? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_3049
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 30/06/2017

Capital requirements deduction for credit risk on exposures to SMEs

Further to Q&A 2135 and Q&A 2268, can the capital requirement deduction (SME factor) be applied for speculative immovable property financing (Corporates) if conditions determined in Article 501(1) and (2) of Regulation No 575/2013 (CRR) are met?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_3012
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/10/2017

Risk weighting attributed to gold bullion coins

Are gold bullion coins included in the term ‘gold bullion’ as used in Article 134(4)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_3011
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 21/04/2017