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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.

List of Q&A's

Article 28(1) of Regulation (EU) 2015/61 on LCR

Can You please explain, what is meant by "Those deposits shall be reported in two different rows depending on whether or not the entire amount of the deposit is covered (by a Deposit Guarantee Scheme or third country equivalent Deposit Guarantee Scheme)" described in COMMISSION IMPLEMENTING REGULATION (EU) 2021/451, Annex XXV, part 2 (Outflows), rows 0240-0260. Could you give an example?  

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Aggregation of retail deposits for checking the criteria for "retail deposits subject to higher outflow rates"

If a natural person has an account at the bank as a natural person and, at the same time, he/she is an owner of a legal entity, which qualifies as an SME, and also has a separate business account at the same bank as a legal entity, shall the accounts of both the natural person and the legal entity aggregated when checking the total deposit balance against the threshold of EUR 500 000? If yes, what shall be the level of legal entity ownership (e.g. 100%, more than 50%, etc.) in order to combine the natural person and the legal entity?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement

Definition of small and non-complex institutions and its applicability to SSM significant institutions

Does an institution that has been determined by the ECB as being significant within the meaning of Art. 6 (4) SSM Regulation* due to its membership to a group of significant institutions according to Art. 40 (2) of SSM Framework Regulation** qualify as small and non-complex institution as provided by Art. 4 no. 1 (145) of Regulation 575/2013? *Council Regulation (EU) No. 1024/2013 conferring specific tasks on the ECB concerning policies related to the prudential supervision of credit institutions ** Regulation (EU) No. 468/2014 of the ECB establishing the framework for cooperation within the Single Supervisory Mechanism between the ECB and national competent authorities and with national designated authorities (ECB/2014/17)

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Reuse of collateral in a repo transaction with collateral substitution rights

Can a bank record an inflow for a reverse repo with a residual maturity of up to 30 days under the LCR, where collateral is being funded in a repo with a residual maturity of more than 30 days, where collateral is allocated on an automated basis and managed by a third party (ie triparty repo), and where the repo has automatic rights of substitution for collateral of the same or better HQLA classification?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement

Recording of necessary documentation in relation to the disbursement of the loan

In relation to  46 of the EBA Guidelines on loan origination and monitoring, what is expected in relation to the 'recording of necessary documentation in relation to the disbursement of the loan', specifically in relation to adherence to the institutions' obligations towards AML/CTF requirements?  

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2020/06 - Guidelines on loan origination and monitoring

LCR treatment of coins and banknotes stored in a centralized vault owned and operated by an external service provider

What is the LCR treatment of coins and banknotes that are stored in a centralized vault owned and operated by an external service provider?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement

Interpretation of the provision on the exemption of the exposure calculation

Do custody accounts kept by a Central Securities Depository (CSD) in order to provide custody services fall under Article 390(6)(c) CRR even if the CSD has no licence to provide payment services under Annex C point (c) of CSDR , but it has license to provide services under point (a)?    

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Effective absence of set-off or netting arrangements

If a statutory set-off or netting right exists and cannot be contractually excluded, would an AT1, T2 or eligible liabilities instrument be automatically considered ineligible pursuant to, respectively, Article 52(1)(r), Article 63(p) or Article 72b(2)(f) of Regulation (EU) No. 575/2013 (CRR) or would the instrument be eligible as long as the conditions for such statutory set-off or netting are not fulfilled, in particular in cases where a counterclaim to be used for set-off or netting does not exist? If a statutory set-off or netting right exists, can be contractually excluded, but has not been excluded, would the instrument be automatically considered ineligible or would the instrument be eligible as long as the conditions for such statutory set-off or netting are not fulfilled, in particular in cases where a counterclaim to be used for set-off or netting does not exist?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

The use of the financial collateral comprehensive method for retail exposures

If an institution uses the combination of A-IRB and F-IRB approaches for its retail (A-IRB) and corporate exposures (FIRB), can this institution then only use the Financial Collateral Comprehensive Method (FCCM) for its corporate exposures? If yes, what should it do for its retail exposures secured by financial collateral?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

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)

Jump-to-default risk weights in specific reporting requirements for market risk

Which risk weights should be used in the case of multiple exposures in different seniority classes and credit quality steps to the same obligor?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/453 - ITS with regard to the specific reporting requirements for market risk

Aggregation of risk-class specific own funds requirements for delta, vega and curvature risks

Should own funds requirement for Sensitivities Based Approach  be the sum of GIRR, CSR, Equity and Forex requirement arising from the scenario with the highest total requirement value? or result from the scenario with the highest total requirement at the individual asset level class? And how to calculate the requirement in Article 325h(4)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Trading book business for the purposes of Article 94 CRR

What is meant by "positions concerning foreign currency"? Any derivative contract that has a currency pairs as underlyng (e.g. forex swap, forward foreign exchange contracts, cross-currency interest rate swaps, option currency)? Also contracts settled in currencies other than the reporting currency?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Common Equity Tier I Minority Interest Calculation

Should a specific level of profit distribution set by a third country competent authority, and communicated specifically to an institution, be considered “any additional local supervisory regulations in third countries insofar as those requirements are to be met by Common Equity Tier 1 capital” for the purposes of the minority interest calculation provided in Article 84 1 i) and ii))  when this limit has been set above legislative prudential requirements with the aim of preserving capital above an specific limit by the way of limiting profit distribution?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Application of Articles 52 and 54 of Regulation No. 575/2013 (CRR) at consolidated level

How should the consolidated level of AT1 instruments where the issuer is a 100% fully owned subsidiary of an EU institution where the subsidiary is established in a third country and has not been designated in accordance with Article 12 of Directive 2014/59/EU (BRRD) as part of a resolution group the resolution entity of which is established in the Union be treated?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

LCR treatment of deposits received as collateral

Should deposit received as collateral for a facility, in the case where a credit institution’s client has an option for early termination of this facility, which could lead to an outflow of the collateral during the next 30 calendar days, be assigned an additional outflow corresponding to 100% in accordance with Article 30(6) of Delegated Regulation (UE) 2015/61?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement

Discount factor for the exposure under the standardised CVA risk capital requirement

Is it still correct for non-IMM banks to discount the exposure according to Article 384 CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)

EBA Guidelines - critical outsourcing - references to BRRD

Pursuant to paragraph 75(o) of the EBA Guidelines on outsourcing arrangements, the outsourcing agreement for critical or important functions should set out a clear reference to Articles 68 and 71 of Directive 2014/59/EU (BRRD). On the other hand, the BRRD, as amended through the Directive (EU) 2019/879 (BRRD 2), imposes an obligation to include such articles only in financial contracts (these will essentially include derivative contracts, repurchase agreements etc.), governed by third country law. Clarification is sought as to whether contracts for critical outsourcing arrangements should incorporate references to Articles 68 and 71 of BRRD, as amended, irrespective of such contracts not being financial contracts pursuant to BRRD. 

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

CRM for off balance sheet commitments

1) Can the part of the off-balance exposure that is covered by the (to be vested) mortgage inscription be taken into account as 'fully secured and completely secured by mortgage' under Article 125(1) CRR?    2) Can the part of the off-balance exposure that is covered by the (to be vested) mortgage guarantee be taken into account as credit risk mitigation under Article 203 CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Original Maturity for off balance sheet items

1) Are loan commitments that constitute (accepted or unaccepted) loan offers to clients to be considered off balance sheet items, which fall under the definition of 'undrawn credit facilities' of Annex 1?    2) The 'original maturity' that is used for the allocation of 'undrawn credit facilities' to either medium risk, or medium/low risk is determined on the basis of the maturity of the commitment or on the basis of the underlying loan of the offer?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable