- Question ID
-
2019_4938
- Legal act
- Regulation (EU) No 575/2013 (CRR)
- Topic
- Credit risk
- Article
-
151
- Paragraph
-
1
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Article/Paragraph
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Not applicable
- Type of submitter
-
Credit institution
- Subject matter
-
Prudential backstop (Regulation 2019/630) and interaction with RWA calculation
- Question
-
Is the prudential backstop deficit under Article 151(1) taken into consideration for the calculation of risk-weighted assets on exposures treated under the advanced IRB approach?
- Background on the question
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Regulation 2019/630 introduced under Article 111(1) of Regulation (EU) No 575/2013 (CRR) that for standardised approach exposures the prudential backstop shortfall is deducted when calculating exposure value and thus no RWA will be calculated on that part of the exposure deducted from available capital. However Regulation 2019/630 does not address how to treat the prudential backstop deficit when calculating RWA on exposures treated under IRB advanced.
We find unclear what is the impact of prudential backstop (Regulation 2019/630) on RWA under IRB advanced. In our view the exposure value to be used for the RWA calculation has to be net of the prudential backstop shortfall and this reading leads to an improved capital solvency ratio.
- Submission date
- Rejected publishing date
-
- Rationale for rejection
-
Please note that as part of adjustments to the Single Rulebook Q&A process, agreed by the EBA and the European Commission, it has been decided to reject outstanding questions submitted before 1 January 2020, when the Q&A process was updated as part of the last ESAs Review. In particular, the question that you have submitted has now regrettably been rejected and will not be addressed.
If you believe your question would still benefit from clarification, you are invited to resubmit your question, adapting it to reflect any legislative, regulatory or other relevant developments that may have occurred since the initial date of submission. The EBA will aim to address resubmitted questions as a matter of priority. When considering to resubmit, you are kindly requested to observe the updated admissibility criteria agreed in the context of the adjustment of the Q&A process, available in the Additional background and guidance for asking questions. We hope for your understanding.
For further information please refer to the press release and the updated Q&A page.
- Status
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Rejected question