Question ID
2024_7116
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Credit risk
Article
172
Paragraph
1
Subparagraph
e, (i)
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
n/a
Type of submitter
Credit institution
Subject matter
Privileged access to foreign currency resources in the context of Art. 172 (1) letter e case (i) CRR
Question

Can local currency denomination, as laid down in Art. 172 (1) letter e case (i) CRR, be employed on an evidence-based material basis, too?

Background on the question

When acting as a co-lender to a multilateral development bank (MDB) and providing foreign currency loans within a so called A-/B-loan-structure, a commercial lending institution is granted privileged access to foreign currency resources of a member state to such MDB. This is due to respective provisions as typically laid down in the MDB’s articles of association which, in turn, are resolved by the obliged countries itself when acting as the MDB’s members.

Such privileged access to foreign currency resources resulting from a co-lender-status to an MDB de facto eliminates transfer risk. History shows that such transactions have never been defaulted due to a transfer risk event.

Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because it is considered that EBA guidance or clarification is not needed with regard to the issue that it raises. For example, this can be the case where it is considered that the existing regulatory framework is sufficiently clear and unambiguous.

The Single Rule Book Q&A tool has been established to provide explanations and non-binding interpretations on questions relating to the practical application or implementation of the provisions of legislative acts referred to in Article 1(2) of the EBA’s founding Regulation, as well as associated delegated and implementing acts, and guidelines and recommendations, adopted under these legislative acts.

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Status
Rejected question