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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

Composition of the first and second lines of defence

What are the units composing respectively the first line of defence and the second line of defence?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2021/05 - Guidelines on internal governance under CRD - repealing EBA/GL/2017/11
  • ID: 2021_5731
  • Topic: Internal governance
  • Date of submission:
  • Published as Rejected Q&A: 31/05/2022

Calculation of specific risk own funds requirement for hedges by credit derivatives under Article 346 (4) CRR

Would be applicable the 80% offset stated in article 346(4) for the calculation of the specific risk own funds requirement of a hedged bond by an standardised credit derivative traded in a recognised exchange in case the maturity of the credit derivative is equal or higher to the bond maturity due to the standarization of the derivative.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2020_5517
  • Topic: Market risk
  • Date of submission:
  • Published as Rejected Q&A: 31/05/2022

Group financing companies of non-financial company groups / definition of "financial sector entity" in Article 4 (1) (27) CRR

Do group financing companies belonging to non-financial company groups (e.g. in the industrial sector) qualify as a "financial sector entity" according to Article 4 (1) (27) CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2020_5122
  • Topic: Other issues
  • Date of submission:
  • Published as Rejected Q&A: 31/05/2022

The combination of values that forms a primary key differs between Annex II and the DPM-model 2.9. and does not account for the reporting of several critical functions.

How should institutions report multiple critical functions for which the values in columns 0010, 0030, 0040 and 0050 are the same?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2018/1624 - ITS on the provision of information for resolution plans
  • ID: 2020_5185
  • Topic: BRRD Reporting
  • Date of submission:
  • Published as Rejected Q&A: 31/05/2022

language versions

In case of discrepancies between text of English version of EBA Guidelines on outsourcing arrangements and its other language versions published on EBA website, which version should prevail - English or local one?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2019/02 - Guidelines on outsourcing arrangements
  • ID: 2022_6344
  • Topic: Internal governance
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

Documentation language - Do IRB documentation need to be in English?

Does IRB documentation need to be in English? Is there any official guideline on what documentation is acceptable in non-English language?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6340
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2022_6339
  • Topic: Liquidity risk
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2022_6338
  • Topic: Liquidity risk
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2022_6335
  • Topic: Other issues
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2022_6330
  • Topic: Liquidity risk
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2022_6329
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2021_6297
  • Topic: Liquidity risk
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2021_6289
  • Topic: Large exposures
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2021_6285
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2021_6279
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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

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
  • ID: 2021_6273
  • Topic: Market risk
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2021_6272
  • Topic: Market risk
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022

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
  • ID: 2021_6270
  • Topic: Market risk
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022