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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

Consistency of treatment between the technical guarantees that are subject to the Pillar 2 requirement (Supervisory Expectation of the ECB) and the technical guarantees that are subject to the Pillar 1 requirement (Regulation EU 2019/630).

Should the exemption of technical guarantees from the backstop calculation subject to the Pillar 2 requirement) be extended to the technical guarantees subject to the Pillar 1 requirement?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2024_7221
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as Rejected Q&A: 20/11/2024

Assessing the level of concentration, measures and indicators

What is EBA's opinion regarding the inclusion or not in the determination of the Herfindahl-Hirschman Index (used for determining additional capital in case of credit risk concentration) of the exposures for which the RWA is zero (zero capital allocation) ?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2022/03 - Guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) and supervisory stress testing under Directive 2013/36/EU
  • ID: 2023_6787
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as Rejected Q&A: 30/05/2023

Treatment of management actions by competent authorities when providing guidance on additional own funds (P2G) within SREP

(a) When providing guidance on additional own funds in accordance with Art. 104b of CRD, should competent authorities adjust for the specifics of an institution’s risk profile with regards to in particular: The level of strategic investments for business expansion, where a rapidly expanding business will have a cost base that to a larger extent is made up of discretionary or non-recurring expansion costs compared to an institution with a lower level / share of investment for business expansion; and The nature of the lending business, e.g., accounting for the difference between a balance sheet primarily made up of short-term assets as compared with a bank with primarily long-term assets, in order to fulfil the requirement of an institution-specific guidance? (b) When providing guidance on additional own funds in accordance with Art. 104b of CRD, should competent authorities assess the credibility of management actions taking into account the specifics of the institution, with regards to in particular: The level of strategic investments for business expansion, where a rapidly expanding business will have a cost base that to a larger extent is made up of discretionary or non-recurring expansion costs compared to an institution with a lower level / share of investment for business expansion; and The nature of the lending business, e.g., accounting for the difference between a balance sheet primarily made up of short-term assets as compared with a bank with primarily long-term assets. in order to fulfil the requirement of an institution-specific guidance?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2018/03 - Guidelines on the revised common procedures and methodologies for SREP and supervisory stress testing (consolidated version)
  • ID: 2021_6278
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

Custom software development and support outsourcing clarification

Company for development and maintenance of banking software has identified the following unclarities related to the EBA Guidelines on outsourcing arrangements (EBA/GL/2019/02) that were published by European Banking Authority (EBA) and for which we ask for clarification/interpretation: Is custom software development, which is based on specifications and orders from a bank, and which covers thematic area or function that the bank defined as a critical function, considered as outsourcing (in terms of the referenced guidelines) when the act of development is performed on an occasional (not recurrent and not ongoing) basis? Is regular custom software maintenance and support of software mentioned in the previous bullet point, which covers thematic area or function that the bank defined as a critical function, considered as outsourcing (in terms of the referenced guidelines) if the company providing the software maintenance and support service doesn’t have access to bank’s production environment or data from the production environment? IT department of the bank exclusively maintains their production environment, and only the bank has access to production environment data (first level support). The company offers second level support to the IT department, which consists of consultations for resolving more demanding problems, which are simulated in the test environment (without any access to the production environment). In case any of the services mentioned in the previous bullet points are considered as outsourcing (in terms of the referenced guidelines), must the contract between the company and the bank implement all guidelines or only those that are relevant for the scope of cooperation between the company and the bank? Please confirm that there is no need for the contract to cover guidelines related to cloud services and outsourcing data processing services if the company does not offer cloud services nor processes any data of the bank.  

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2019/02 - Guidelines on outsourcing arrangements
  • ID: 2021_6191
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

Weighting of EVE gains of domestic currency by a factor of 50% when calculating the aggregate EVE change for each interest rate shock scenario

When calculating the aggregate EVE change for each interest rate shock scenario, should EVE gains of the domestic currency (i.e. EUR in most cases) be weighted by a factor of 50% or should such gains be weighted by a factor of 100%?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2015/08 - Guidelines on the management of interest rate risk arising from non-trading activities
  • ID: 2020_5419
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as final Q&A: 11/02/2022

Aggregation of curves in the case of real interest rate curves (linked to inflation)

When calculating the supervisory outlier test, in the case of real interest rate curves, (i.e CLF, IGPM, IPCA, UVA, CER, UDI…), how should these factor risk be treated?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2018/02 - Guidelines on the management of interest rate risk arising from non-trading book activities
  • ID: 2019_4976
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Discount rates in Economic Value of Equity calculations

Is the usage of different yield curves related to the calculation of value risk measures (e.g. Economic Value of Equity) or is it related to the calculation of earnings measures (e.g. Earnings-at-Risk) or both?If an institution prefers to base the Economic Value of Equity on the risk-free swapcurve (also for its internal IRRBB management), is the institution still required to use different yield curves (including a yield curve with a credit spread curve) other than the swapcurve for Economic Value of Equity?If it is mandatory to use different yield curves for the Economic Value of Equity calculations, is the following sufficient in order to meet the paragraphs 42c and 42d: (a) to base the Economic Value of Equity (and its related risk measures such as duration of equity) on the risk-free swapcurve, and (b) to base the Earnings-at-Risk measures and the Market Value of Equity on different yield curves (including instrument/credit-specific curves)?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2015/08 - Guidelines on the management of interest rate risk arising from non-trading activities
  • ID: 2016_2697
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:

AT1 distribution and full year loss

Except what is provided under Article 141 of the CRD, is there any restriction imposed on distribution for an institution posting a full year (FY) Net Loss ? (assuming th entity in question runs with excess capital vs. regulatory requirements, so it's not under MDA restrictions)

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2687
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

SREP and combined buffers

Article 104(1)(a) of the Directive 2013/36/EU (CRD) states that competent authorities have the power to require institutions to hold own funds in excess of the requirements set out in "Chapter 4 and Regulation 575/2013", i.e. in excess of the minimum capital requirements set in the CRR plus the capital buffers. Moreover, Articles 129(5), 130(5) and 131(13) of the CRD prevent the use of CET1 capital required per Article 104 to meet any of the buffer CET1 requirements.1) When the competent authorities give to an institution an individualised CET1 capital requirement (so-called SREP requirements or Pillar 1 + Pillar 2 requirements), does this include any potential combined buffer requirements, since any additional requirement per Article 104 should come on top of the requirements imposed by Chapter 4 of the CRD and by the CRR ?2) In particular, if a competent authority changes the systemic risk buffer (SRB) or the other systemically important institutions buffer (O-SIIB) applicable to a bank would this not increase the total Pillar 2 + Pillar 1 requirement of the bank, unless the new Pillar 1 requirement went above the old Pillar 1 + Pillar 2 requirement or unless the competent authority also changed the total SREP requirement of the bank?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2302
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as final Q&A: 26/08/2016

Credit claims in liquidity stress test buffer

Are credit claims eligible for the liquidity buffer (counterbalancing capacity) if they are not already pledged with the central bank? In particular, would the credit claims originally intended for covered bonds form part of the bank’s pool of collateral for monetary policy credit operations before they become eligible for the counterbalancing capacity (CBC)?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2003
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as final Q&A: 13/04/2018

Meaning of Article 79 (b) of Directive 2013/36/EU (CRD)

What should standardised banks do in order to live up to CRD Article 79 (b)? Should standardised banks make their own assessment of the risk weights assigned to unrated counterparts? I.e. If a banking counterpart (institution) in a 0 % risk weight country is unrated and therefore assigned a risk weight of 20 % according to Article 121of Regulation (EU) No 575/2013 (CRR), but an internal assessment shows that other comparable counterparts with a rating get assigned a 50 % risk weight according to Article 120 of CRR, what should the calculating institution do? Should the calculating institution overwrite the 20% with 50 % or should the calculating institution add the difference in risk weighted assets under Pillar II?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_249
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as final Q&A: 20/12/2013