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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

Definition of subordinated exposures

What is the definition for subordinated exposures within the context of article 161?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3296
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Inclusion (or not) of a particular "timing loss" in the C 16.00 and C 17.00 template

Shall a particular "timing loss" in the Operational Risk Losses be included or not in the reporting template for operational risk?

  • 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Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2019_4920
  • Topic: Operational risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Application of a Permanent Partial Use exemption under Article 150(1)(d) to the European Commission

Does the permanent partial use exemption under Article 150(1)(d) of CRR encompass European organisations such as the European Commission? Does the permanent partial use exemption under Article 150(1)(d) of CRR encompass European organisations such as the European Commission?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3256
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

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: 2017_3241
  • Topic: Other issues
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Deduction of deferred tax assets

Regarding the phasing-in percentages established in Article 478(2) of the CRR, how should the deduction amount  be calculated during the transitional period when part of the stock of DTAs existed prior to 1 January 2014?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3224
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Market risk capital treatment for third country CIU positions

For the purposes of Article 349 (F), which third country legislation may be considered to be equivalent to Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3195
  • Topic: Market risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Application of Articles 473a(3) and 473a(4) CRR (Practical application of Article 473a to exposures for which the approach to calculate RWAs changes after the day of initial application of IFRS 9

If an institution, for purposes of calculating credit risk RWAs, is migrating to the Standardised approach as of the reporting date, and formerly was under the IRB approach on the date of initial application of IFRS 9: :- should exposures relating to the reporting date (described under Article 473a(3)(a)) be included in the calculation concerning exposures which are subject to the Standardised approach (i.e. shall exposures included be those subject to the Standardised approach on that date)?- Should exposures relating to the date of initial application of IFRS 9 (described under Article 473a(3)(b)) be included in the calculation concerning exposures which are subject to the IRB approach (i.e. shall exposures included be those subject to the IRB approach on that date)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4916
  • Topic: Accounting and auditing
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Appropriate Risk Weight for purchased defaulted assets

Does the entering into force of the Regulation (EU) 2019/630 of the European Parliament and of the Council of 17 April 2019 (the “Prudential Backstop Regulation”) affect the determination of which risk weight that should be applied according to Article 127 CRR when an entity subject to CRR purchases non-performing loans booked at purchase price (net book value, “NBV”), which is significantly below the loans’ gross book value (“GBV”)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4909
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Calculation of the amount of holdings of own Common Equity Tier 1 instruments on the basis of the net long position

How should the condition in Article 42 a) i) “(i) the long and short positions are in the same underlying exposure and the short positions involve no counterparty risk” be applied when there are long and short positions on the same underlying reference with the same counterparty under the same master netting agreement ?Are the single net amounts fixed by such contracts to be considered rather than the gross amounts? Explanatory note: The master netting agreement we are considering complies with the conditions required under CRR (Article 206)

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4904
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Calculation of the amount of holdings of own Common Equity Tier 1 instruments on the basis of the net long position

Could it be assumed that short positions maintained with a Qualifying Central Counterparty do not involve counterparty risk according to Article 42 a) i) CRR and thus be netted for the purposes of the calculation of the amount of holdings of own Common Equity Tier I instruments to be deducted under point (f) of Article 36(1)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4903
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Own funds instruments passed on to employees of the institution as part of their remuneration

If an authority has already granted permission in advance to buy a certain predetermined amount of shares for “discretionary trading activity over treasury shares” and those shares are the ones that are passed on to employees as part of their remuneration. Under Article 29 of Commission Delegated Regulation 241_2014 is there needed a separate permission to pass on to employees those own shares?

  • 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: 2019_4902
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Large exposures regime for exposures treated as the exposures to institutions in accordance with Article 119(5) of CRR

Shall the exposure, that for the purpose of calculating risk weighted assets for credit risk is treated as the exposure to institution in accordance with Article 119(5) of CRR, should also be treated as the exposure to institution when calculating limits for large exposures in accordance with Article 395 of CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4898
  • Topic: Large exposures
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

USA public sector entities risk weight

USA is listed by the EBA as applying supervisory and regulatory arrangements at least equivalent to those applied in the Union. However the competent authorities of this country does not require the use of ECAI ratings to assess risk weights of exposures to public sector entities. Should we nevertheless consider that this competent authority treat exposures to public sector entities in accordance with paragraph 1 or 2 of article 116, and so should we risk weight these exposures in accordance to paragraph 1 or 2?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4889
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Calculation of supervisory delta and adjusted notional for digital options

Despite the fact that the Basel committee in its Q&A on counterparty credit risk (march 2018), has explained that the adjusted notional should be calculated by treating them as call/put spreads where the upper and lower strike levels should be modified to reflect a 5% difference up and down to the actual strik level in the trade, this approach has not been echoed in the CRR text published as of June 2019. Instead a much simpleler approach has been described which is described in article 279b 1 (c) where the digital payoff should be taken as the adjusted notional amount. Are institutions still allowed to use the Basel committee approach as described above ?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4834
  • Topic: Market risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Minimum loss coverage of non-performing exposures under Article 469a, subparagraph 2 CRR

When does a transaction that falls under the provisions on the minimum loss coverage of non-performing exposures under Article 469a, subparagraph 2 CRR become non-performing within the meaning of Articles 47a to 47c CRR? From the day on which the risk position increases due to a forbearance measure (e.g. 01.06.2019) or from the day on which the risk position actually became non-performing (e.g. 01.12.2018)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4829
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Interpretation of the term "all observed defaults" in Article 500 of Regulation (EU) No 575/2013 as amended

Both Article 181(1)(a) and Article 500(1)(c) of Regulation (EU) No 575/2013 as amended contain the expression “all observed defaults”. Is that expression meant to be interpreted in the same way in the context of both articles to include both completed and incomplete recovery processes? It is our understanding of Article 181(1)(a) that no observed defaults should be excluded. This understanding is further supported by paragraph 163 of EBA/GL/2017/16, which states that for the purpose of LGD quantification, “institutions should not exclude any defaults in the historical observation period that fall within the scope of application of the LGD model”. Should this view also be extended to the calculation of the threshold under Article 500(1)(c) of Regulation (EU) No 575/2013 as amended, and can it be in particular be deduced that neither completed nor incomplete recovery processes can be excluded?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4820
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Interaction of voluntary capital deduction (CRR art 3) with required coverage of non-performing exposures (art 47c), exposure value for credit risk (art 111) and treatment of expected loss amounts (art 159)

Can voluntary CET1 reductions taken following CRR article 3 qualify as 'other own funds reductions' referred to in articles 47c, 111 and 159?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4801
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Treatment of open repos for leverage ratio exposure measure

Could securities financing transactions (SFT) with no explicit end date (but which can be unwound at any time by any counterparty, e.g. open repos) be considered as bearing economic similarity between open maturity and overnight SFTs? If so, is it possible to net the cash payables and cash receivables in SFTs with the same counterparty subject to contractual legal rights to close the trade on the next day and in principle similar to overnight trades?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/62 - DR with regard to the leverage ratio
  • ID: 2019_4777
  • Topic: Leverage ratio
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022