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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

Reduction, distribution and reclassification of share premium accounts related to own funds instruments

May an institution announce to the holders of own funds instruments the reduction, distribution or reclassification of related share premium accounts before that institution has obtained the prior permission of the competent authority foreseen under Article 77(1)(b) CRR?

  • 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: 2021_6031
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

AVC

Is AVC intended to apply to Multilateral Development Banks?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2021_5715
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Treatment of guaranteed export financing transactions under Standardised Approach

Under the Standardised Approach for credit risk, can institutions apply a 0% risk weight to the guaranteed part of export financing transactions if (i) the loan is denominated and funded in the domestic currency of the central government acting as guarantor and (ii) the guarantee is also denominated in this currency while the domestic currency of the borrower is different?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2021_5760
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Credit faclity level

Is it possible to assign default according to the purpose of the loan (e.g only the exposure that was granted for renovation) and treat it as at facility level or not? In case of one agreement for 2 purposes and 2 amounts granted, from the regulatory perspective can we treat such approach as default assignment at facility level or not?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2016/07 - Guidelines on the application of the definition of default under Article 178 CRR
  • ID: 2020_5447
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

SME supporting factor for exposures collateralised by residential property

How should the SME supporting factor be calculated for exposures to SME where the total amount owed to the institution is collateralised by residential property?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2020_5337
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Definition of the parameter E* in the formula regarding the Adjustment of risk-weighted non-defaulted SME exposures.

We believe there is a need of clarification in the definition of the parameter E* in the formula of the article 501 in order to insure that the result of the formula is valid in all cases.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2020_5223
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Large exposures – excluding exposures if fully deducted from own funds

Will Q&A 787 still apply when the amended large exposures rules in accordance with CRR2 are in force?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2020_5116
  • Topic: Large exposures
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Scope of Article 118 CRR - World Food Programme

Can the  Risk Weight of 0%  according to Article 118 CRR be applied on  the World Food Programme (“WFP”)?   According to Article 118(f) CRR exposures to an international financial institution established by two or more Member States which has the purpose to mobilise funding and provide financial assistance to the benefit of its members that are experiencing or threatened by severe financing problems, shall be assigned a risk weight of 0%. Can WFP be classified as an international financial institution in the meaning of Article 118 (f) CRR ? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6414
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Article 28 Outflows from other liabilities

Credit institution is not traditional credit institution - institution offers only loans and deposits. Client's have under their name Current account, but client's cannot operate those accounts. Client's can make payments to those accounts from other credit institutions and those accounts are used to pay out loans to client's account in other credit institutions. Does such current accounts should be reported for LCR calculation?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6413
  • Topic: Liquidity risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Scope of CRR definition of Financial Institution

Are deposits maintained by entities meeting the literal requirements of Article 4(1)(26) CRR excluded from the coverage of the Deposit Guarantee Schemes (DGS)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6405
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

LCR: Eligibility of HQLA held at EU subsidiary level for the consolidated HQLA liquidity buffer

Do credit institutions need to take into consideration as potential restrictions on the transferability of liquidity within the EU the (national) prudential rules that are not intended to restrict transferability of liquid assets but in practice may do so when assessing whether or not a liquid asset can be deemed readily accessible to a credit institution at consolidated level within the meaning of Article 8(2) LCR DR? For instance, do national statutory large exposures limits established by Member States pursuant to Article 493(3) CRR or statutory capital requirements at individual level more generally constitute such practical or legal impediment from consolidated perspective?

  • 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_6402
  • Topic: Liquidity risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Mandatory substitution approach according to Articles 401(4) and 403 CRR for Lombard Facilities

Could you please clarify the applicability of Article 401(4) and 403(1)(a) for other funded credit protection such as life insurance policies pledged to the lending institution?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6396
  • Topic: Large exposures
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Risk weight for asset class of non-preferred senior debt

What risk weight should be applied to non-preferred senior (NPS) debt, 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: 2022_6394
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Interpretation of K-DTF

1. Are those transactions executed on behalf of the clients in its own name, as per DTF definition, to be included under K-COH?  2. Furthermore, are transactions pertaining to assets included in K-AUM to be excluded from K-DTF?    

  • Legal act: Regulation (EU) No 2019/2033 (IFR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6383
  • Topic: K-factor requirements
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Own estimation of conversion factors for off-balance sheet exposures for binding mortgage/loan offers

Is the own estimation of credit conversion factors considered relevant for binding mortgage/loan offers, with a maturity of less than one year?. Should the total amount of a binding mortgage/loan offer be considered as "currently undrawn amount of a commitment that could be drawn" or not?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6368
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

EBA/GL/2017/16 Interpretation

Conformity of the  implementation pursuant to Article 152 CRR to EBA/GL/2017/16

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2017/16 - Guidelines on PD estimation, LGD estimation and the treatment of defaulted exposures
  • ID: 2022_6361
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Credit protection by an insurer provided directly on the pool of receivables

Can credit protection by an insurer, if provided directly on the pool of receivables (and not on a position held by an investor or originator in a structured transaction, can this protection), under circumstances, be taken into account in determining whether the transaction is tranched?

  • Legal act: Regulation (EU) No 2017/2402 (SecReg)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2018/09 - Guidelineson the STS criteria for non-ABCP securitisation
  • ID: 2021_6293
  • Topic: Provisions applicable to all securitisations
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Treatment of multi-seller securitisations in CRR (Significant Risk Transfer)

It is not clear from the provisions of the CRR how to treat multi-originator securitisations regarding the existence of significant risk transfer.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2021_6143
  • Topic: Securitisation and Covered Bonds
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Calculation of the insufficient coverage for NPEs and capital absorptions related to Pillar 1 requirements on the same exposure

Regarding the applicable amount of the insufficient coverage to be deducted from own funds as per Article 36 (1) (m) CRR, to be determined at exposure level according to Article 47c(1) (b) of Regulation (EU) 2019/630, should the credit institutions applying the IRB approach consider the Pillar 1 capital absorptions already computed for credit risk for the calculation, on the same exposure, of the applicable amount to be deducted from CET 1 as per above, precisely to avoid any double-counting?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2021_5739
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 31/05/2022