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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

Clarification on Article 8 (6) of Regulation (EU) 806/2014 (SRM)

Should the reference to paragraph 9 in Article 8(6) of Regulation (EU) 806/2014 (SRM) be understood as limited to the summary of the key elements of the resolution plan?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2093
  • Topic: Resolution plans
  • Date of submission:

Eligible Liabilities in the context of Articles 2(71) and 45(4)

Does the term "eligible liabilities" defined in Article 2(71) only cover these debt instruments which fulfil conditions laid down in Article 45(4), or does it relate to particular categories of liabilities in general?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2073
  • Topic: Other topics
  • Date of submission:

Change of minimum values of exposure weighted average LGD for exposures secured by property in their territory

Does Article 164(5) of Regulation (EU) No 575/2013 (CRR) allow competent authorities to set higher minimum values of exposure weighted average LGD for exposures in one or more parts of its territory on the basis of Financial stability considerations? (In the same way as it is possible under Article 124(2) CRR)

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1992
  • Topic: Credit risk
  • Date of submission:

Clarification of disclosure requirement for severance

Article 450(1)(h)(v) and Article 450(1)(h)(vi) both refer to severance; (v) asks for severance payments made during the financial year and (vi) asks for severance payments awarded during the financial year. Are these one and the same?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1985
  • Topic: Transparency and Pillar 3
  • Date of submission:

Reporting on Stable Funding

Article 427(1) of Regulation (EU) No 575/2013 (CRR) requires institutions to report on Stable Funding in accordance with the reporting requirements set out in Article 415(1) and the uniform formats referred to in Article 415(3). Therefore is it correct that Article 415(2) is not a requirement of Stable Funding reporting?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1912
  • Topic: Liquidity risk
  • Date of submission:

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:

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:

Resolution action with regard to a holding

When can a resolution action be taken with regard to a holding according to Article 33(4) of Directive 2014/59/EU (BRRD): are the conditions individual or cumulative?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1796
  • Topic: Resolution objectives and triggers
  • Date of submission:

Market making prior to 5 years from issuance of AT1-/T2-Instruments – follow up of Q&A 2013_290

In the case of a repurchase of own funds instruments for market making pur-poses, competent authorities may give their permission in advance in order to reduce own funds for a certain predetermined amount within the limits laid down in Article 29(3) of Regulation (EU) No 241/2014 (RTS on own funds part 1 and 2). However, the RTS does not specify when market making can take place. Thus, clarification is sought whether repurchases for market making purposes are permissible before five years after the date of issuance provided that the conditions stipulated by the RTS 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_1791
  • Topic: Own funds
  • Date of submission:

Large AFS exposures and accounting for OCI unrealised gains

The question is regarding the ‘’exposures’’ definition (article 389 of CRR IV) and how to deal with assets on the Available For Sale (AFS) accounting portfolio (and hence valued at fair value through Other Comprehensive Income (OCI)) during the transitional period to a ‘’fully-loaded CRR IV’’. More specifically: If the 2014 transitional arrangements include 0% (exclude 100%) of OCI-unrealised gains from CET1 capital (and thus from ‘’eligible capital’’), would it be admissible for the sake of ‘’numerator-denominator consistency’’ to deduct those OCI-unrealised gains from the ‘’exposure’’ value, under the large exposures framework? Considering the above, what would be the approach for the following year (2015) with a transitional arrangement of 20% inclusion (80% exclusion) of OCI-unrealised gains? What would the treatment for OCI-unrealised losses be? How would this issue be dealt with in the capital requirements framework under the standardised approach for credit risk?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1716
  • Topic: Large exposures
  • Date of submission:

Mark-to-Market Method: Residual Maturity for cash settled contracts

Cash settled derivatives may reference an underlying with a defined maturity, for example a cash settled interest rate swaption or a cash settled bond forward. The market value of these derivatives at maturity will be set to Nil as the derivative expires with or without payment to the buyer of the option/forward counterpart. For such contracts, what relevant residual maturity should be used to determine the appropriate percentage ("add-on") from Table 1 in deriving the potential future credit exposure of the contract? Is this the residual maturity of the derivative contract or is it the residual maturity of the underlying instrument?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1701
  • Topic: Market risk
  • Date of submission:

Liquidity requirements: scope of applicability for investment firms

What are the prudential requirements for the following firms?a) investment firms that are authorised to provide the investment service referred to in point (3) of Section A of Annex I to Directive 2004/39/EC but are not authorised to provide the investment service referred to in point (6);b) investment firms that are authorised to provide the investment service referred to in point (6) of Section A of Annex I to Directive 2004/39/EC but are not authorised to provide the investment service referred to in point (3);c) investment firms that are authorised to provide both the investment services referred to in point (3) and (6) of Section A of Annex I to Directive 2004/39/EU.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1645
  • Topic: Other issues
  • Date of submission:

Publication of gross or net positions for derivative transactions

In template B, should banks publish gross or net positions in the case of derivative transactions, where collateral could be posted and received between the two same counterparties?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2014/03 - Guidelines on disclosure of encumbered and unencumbered assets
  • ID: 2014_1640
  • Topic: Transparency and Pillar 3
  • Date of submission:

Interaction of Article 227 of the CRR (0% volatility adjustment under FCCM) and Article 401(3) (stress test of realisable value of collateral)

Our question concerns the application of Article 227 of the CRR (0% volatility adjustment under FCCM) and the interaction with the collateral stress test described in Article 401(3). The latter requires collateral values to be stressed, and the impact on Article 395(1) to be determined. It follows that the own funds requirement for large exposures in the trading book (calculated under Article 397 of the CRR) is adjusted upwards to take account of the stressed collateral values. Where the criteria set out in Article 227 of the CRR are met and 0% volatility adjustment is applied to repo/reverse repo transactions, is this exposure value taken as the base case for comparison with the stressed collateral impact calculated under Article 401(3)? Or are these two articles to be read in the reverse order, such that 0% volatility haircuts per Article 227 are also applied in the collateral stress test (Article 401(3))?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1573
  • Topic: Large exposures
  • Date of submission:

Treatment of central banks as non-financial customers or financial customers

If an institution has unsecured deposits from a central bank, are those deposits from financial customers or deposits from non-financial customers?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1446
  • Topic: Liquidity risk
  • Date of submission:

Derogation for small trading book business

According to the Article 94 of Regulation (EU) No 575/2013 (CRR) there is a possibility to calculate capital requirement in accordance with Article 92(3) point (a) CRR in respect of institution’s trading-book business. But the calculation of trading-book business is not enough precisely mentioned in Article 94 CRR. Should institution calculate this trading-book business based: (1) on overnight positions (as at the end of business day) or (2) on daily turnover in financial instruments?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1367
  • Topic: Market risk
  • Date of submission:

Calculation of the remuneration bracket

Could EBA clarify which categories of staff should be taken into account when the remuneration bracket is calculated?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 604/2014 - RTS Remuneration: criteria to identify categories of staff
  • ID: 2014_1321
  • Topic: Remuneration
  • Date of submission:

Shareholder approval for a firm to increase the permitted ratio of fixed to variable remuneration

(i) Could the EBA clarify the procedure to be followed for a firm to increase the variable remuneration above the basic limit of 100 % of the fixed remuneration. In particular with regard to: whether the percentages referred to in the second indent of 94(1)(g)(ii) should be counted by reference to share or ownership voting rights or the number of individual shareholders or owners, (ii) whether the 75% threshold, which applies when fewer than 50% of shares are represented in the vote and the 66% threshold, which applies when at least 50% of shares are represented, are percentages of the share or ownership voting rights represented or the firm’s whole issued share capital or ownership rights, (iii) is there a definition of the concept of shares or ownership rights being “represented”? (iv) Can staff who are directly concerned by the higher maximum levels of variable remuneration exercise any voting rights they may have?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1260
  • Topic: Remuneration
  • Date of submission:

Determining the exposure value for regular way securities transactions

If settlement date accounting is employed in the recording of regular way securities transactions then there are no balance sheet entries between trade date and settlement date. In this case would the impact of unsettled transactions not be included in the exposure value?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1255
  • Topic: Leverage ratio
  • Date of submission: