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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.

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List of Q&A's

Capital instruments eligible as Tier 2 Capital

Under the CRR, capital instruments and subordinated loans shall only qualify as Tier 2 instruments provided that the conditions outlined in Article 63 are met. This includes the condition that “the instruments are directly issued by an institution and fully paid up” as per Article 63(a). As further outlined in Annex II instruction to row 0771, such capital instruments also include subordinated loans insofar that they fulfil the eligibility criteria. We would like to request clarification on the eligibility criteria of Article 63(a) in the context of an amendment in the regulation’s text of Article 64, effected via CRR II (Regulation 2019/876). This clarification is sought with the aim of determining whether the “accrued interest” on subordinated debt may be eligible for inclusion as Tier 2 capital, having regard to Article 63(a) and Article 64 in particular.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
  • ID: 2023_6793
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 16/08/2023

Negative Goodwill

Positive Goodlwill ie where a firm has purchased an entity above book value, is deducted from CET1 to determine the elligible capital balance. However how should Negative Goodwill be treated ie where a firm has purchased an entity at a discount? The profit on the purchase goes through the purchasing firm's P&L so does that mean negative goodwill is elligible to be included in CET1 capital?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2016/10 - Guidelines on ICAAP and ILAAP information collected for SREP purposes
  • ID: 2023_6768
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 16/08/2023

Clarification on treatment of repurchase agreements and reverse repurchase agreement, as well as securities lending/borrowing of the banking book and of the trading book under the counterparty credit risk and the treatment of these same transactions under standardised approach of credit risk.

A securities repurchase (repo) is an agreement whereby a transferor agrees to sell securities to a transferee at a specified price and repurchase the securities on a specified date and at a specified price. Since the transaction is regarded as a financing (liability item) of the transferor for accounting purposes, the securities remain on the balance sheet of the transferor. As for the transferee the transaction is treated as a collateralized loan (asset item) for accounting purposes. When referring to “repurchase agreements” in art. 271 CRR, does it applies both to transferor and transferee exposures (in a manner analogous to securities lending transactions on which specific mention to both parties of a transaction –lending and borrowing- is made)? In essence, counterparty credit risk is a bilateral risk, and as such it seems reasonable to capture the risk of both counterparties, even if a transferor and a securities lender will both have accounted the operation as a liability item. Shall the institutions include all repurchase agreements and securities lending/borrowing for counterparty credit risk capital requirements purposes regardless of whether they have been accounted for within the trading or the banking book? According to article 271 (2) an institution shall include the exposure value of repurchase transactions and securities lending/borrowing for counterparty credit risk capital requirements purposes, without making any distinction as to whether they belong to the banking or to the trading book. The exposure value shall be calculated either in accordance with Chapter 4 or Chapter 6 of Title II. However, article 92 (3) (f) states that only SFT transactions of the trading book exposures are subject to counterparty risk capital requirements. Although it could be also interpreted that SFT transactions and agreements of the banking book are also subject to counterparty risk capital requirements according to article 92 (3) (a) as it refers to the whole Title II (including Chapter 6 –counterparty credit risk-). To make things even more confusing, according to article 111 (2) and article 166 (7) the exposure value of any repurchase agreements and securities lending/borrowing shall be included for credit risk capital requirements purposes and it shall be calculated either in accordance with Chapter 4 or Chapter 6. Following the argumentation set out above, the credit risk related to the counterparty in repurchase agreements and securities lending/borrowing of the banking book might be captured twice, once under the standardised approach/IRB method scheme (Chapter 2 or 3) and again under the counterparty credit risk regime (Chapter 6). It does not seem to make sense to ask institutions for capital requirements twice for the same risk concept. Can you please confirm which is the correct treatment for the credit risk related to the counterparty of repurchase agreements and securities lending/borrowing of the banking book? Or do articles 111(2)/116(7) refer to a risk concept different that article 271(2)? Do both parties of a same transaction –transferor and transferee, lender and borrower- have to capture the credit risk related to the counterparty? The same argumentation applies to derivatives, long settlement transactions and marging lending transactions of the banking book.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6775
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 27/07/2023

Value of domestic payment transactions

Should the value of domestic payments transactions between credit institutions and central banks be considered for this indicator?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2019/348 - RTS on simplified obligations for recovery and resolution planning
  • ID: 2023_6832
  • Topic: Simplified obligations
  • Date of submission:
  • Published as Rejected Q&A: 26/07/2023

Calculation of the NPL ratio for determining F_23.00 to F_26.00 reporting requirements

In calculating the ratio outlined in Article 11(g)(ii) of the ITS on Supervisory Reporting to determine applicability of reporting requirements for F_23.00 to F_26.00, should institutions exclude cash balances at central banks and other demand deposits from both numerator and denominator?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
  • ID: 2023_6818
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as Rejected Q&A: 22/07/2023

v11962_m;v11963_m; v11964_m; v11965_m; v11966_m; v11967_m; v11968_m; v11969_m; v11970_m; v11971_m; v11972_m; v11973_m; v11974_m; v11975_m; v11976_m; v11977_m; v11978_m; v11979_m; v11980_m; v11981_m; v11982_m; v11983_m; v11984_m; v11985_m; v11986_m; v11987_m; v11988_m; v11989_m; v11990_m; v11991_m; v11992_m; v11993_m; v11994_m; v11995_m; v11996_m; v11997_m; v11998_m; v11999_m; v12000_m; v12001_m; v12002_m; v12003_m; v12004_m; v12005_m; v12006_m; v12007_m; v12008_m; v12009_m; v12010_m; v12011_m; v12012_m; v12013_m; v12014_m;

Why there is still some validation rules which control if Financial Garantee and Collateral are less than the Gross Carrying Amount in FINREP 19.00?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6814
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as Rejected Q&A: 22/07/2023

EBA VR v7872_m; v7873_m; v7874_m; v7875_m; v7876_m; v7877_m

Why there is still some validation rules which control if Financial Garantee and Collateral are less than the Gross Carrying Amount in FINREP 18.02?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6813
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as Rejected Q&A: 22/07/2023

Explanation regarding the term "non-reducible"

Could you please explain what does mean the term "nonreducible" in the context of life insurance policy pledged to a lending institution?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6786
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/07/2023

Taxonomy 3.2: Are the validation rules v6327_m and v6332_m consistent?

In Annex II to Regulation (EU) 2021/451, chapter 6.1.2 referring to template C 32.01, the row of the line 0120 “shall correspond to row 0250 of template F 01.01 of Annexes III and IV to this Implementing Regulation”. By this way, the 0120 FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGE OF INTEREST RATE RISK may contain negative values. Refer the annex XV of the same implementing regulation, the corresponding validation rules are defined in the taxonomy 3.2 like this: v6327_m: {c0020} <= {c0010} ; Severity: Error v6332_m: {c0090} <= {c0080} ; Severity: Warning However, when the cell C32.01_A0120_0010 is negative, it will be necessary lower than the cell C32.01_A0120_0020 (OF WHICH: TRADING BOOK) and the control v6327_m is wrongly activated. We have the same analysis between the C32.01_A0120_0080 and C32.01_A0120_0090 for the control v6332_m Should these validation rule should be treated in absolute value to be consistent?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
  • ID: 2023_6805
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as Rejected Q&A: 20/07/2023

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  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions
  • ID: 2023_6829
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 20/07/2023

near miss

Hi I am looking for the definition and description of near- miss events and if possible also provide some examples. 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6801
  • Topic: Operational risk
  • Date of submission:
  • Published as Rejected Q&A: 10/07/2023

Eligibility of communication by AISPs with ASPSP throughout interface used for authentication and communication with the ASPSP's payment services users in case of ASPSP’s exemption from the fall back mechanism

Question no 1:   Does a fact, that based on art. 33(6) RTS, given ASPSP was granted by competent authority with exclusion from the obligation to set up the contingency mechanism described under art. 33(4) RTS, means, that such exemption merely gives this ASPSP a right not to set up the contingency mechanism, and hence, this is up to ASPSP to enjoy and to follow this exclusion, or whether, in opposition, this exemption creates on ASPSP side obligation to bring this exclusion to life.   Question no 2:   Does a fact, that given ASPSP was granted by competent authority with exclusion from the obligation to set up the contingency mechanism described under art. 33(4) RTS, creates on AISP’s end any kind of obligation, for instance lack of right to communicate with ASPSP in question throughout interface made available to the payment service users for the authentication and communication with their ASPSPs.

  • Legal act: Directive 2015/2366/EU (PSD2)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2018/389 - RTS on strong customer authentication and secure communication
  • ID: 2023_6753
  • Topic: Strong customer authentication and common and secure communication (incl. access)
  • Date of submission:
  • Published as Rejected Q&A: 10/07/2023

requirements for professional experience of representatives and board members of EMIs

Dear Sir/Madam,    In the process of licensing an EMI, the management of the company aplying for a licese is required to have certain professional qualifications: experience, clean record, good reputation,etc... As PSD2 does not regulate this topic, each National Bank has set different requirments. The same pereon may be elidgible under the requirments of central bank of one country while not elidgible for another. Usually, the requirments are for banking and equivalent proffesional background and experience.  Profesionals with technology background (eg. Computer Science, blockchain, software development, AI, information management) are not elidgible. However technology is one of the main drivers of innovation and competitiveness in both banks and fintech.    In this regard, I have two questions:  1. Is EBA discussing any harmonisation of requirments for profesional experience of managing teams of EMIs to be enforced in a new updated PSD2? 2. If yes, does EBA consider allowing technology related profesionals to hold management possitions in EMIs?    Best regards,  Filip Mutafis  

  • Legal act: Directive 2015/2366/EU (PSD2)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6750
  • Topic: Authorisation and registration
  • Date of submission:
  • Published as Rejected Q&A: 10/07/2023

Initial Capital

What is the initial capital requirement if a payment institution is providing: (a) any of the payment services as referred to in points (1) to (5) of Annex I and service (6) and (7). (b) any of the payment services as referred to in points (1) to (5) of Annex I and service (6) . (c) any of the payment services as referred to in points (1) to (5) of Annex I and service (7).

  • Legal act: Directive 2015/2366/EU (PSD2)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6570
  • Topic: Authorisation and registration
  • Date of submission:
  • Published as Rejected Q&A: 10/07/2023

Calculation of the CET1 to be used as available stable funding in NSFR

It is not clear the amount of CET1 that should be part of the NSFR, and whether it can be calculated out of items reported in C01.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6804
  • Topic: Liquidity risk
  • Date of submission:
  • Published as Rejected Q&A: 29/06/2023

Algorithm to calculate the TOP Institution (resp. Shadow Banking) te report in C27 of Large Exposure Report

How to calculate the TOP 10 Institutions (resp. Shadow Banking) for GCC? Should be have to consider the exposure at countrepart level or consolidated level?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
  • ID: 2023_6785
  • Topic: Large exposures
  • Date of submission:
  • Published as Rejected Q&A: 29/06/2023

European Union Allowances (EUA) as credit risk mitigant

Could European Union Allowances (EUA) received by a credit institution as collateral be considered as eligible one from prudential point of view ? If yes, how EUA should be considered ? As financial collateral or as other physical collateral ?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2023_6712
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 29/06/2023

CRM substitution in case of equal risk weight

Should Credit Risk Mitigation with substitution effects on the exposure be applied (and presented in COREP) in case of an original exposure subject to unfunded credit protection (meeting all applicable eligibility requirements) where the risk weight/risk-weighted exposure amount remains equal after the substitution? Is there any difference depending on the approach? (SA/FIRB/AIRB)

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
  • ID: 2022_6621
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as Rejected Q&A: 29/06/2023

Traditional SRT securitisations with derecognized underlying assets

According to the instructions included in Regulation (EU) 2020/429, the column 0210 of C 14.00 shall show the following: “…Value adjustments shall include any amount recognized in profit or loss for credit losses of financial assets since their initial recognition in the balance sheet.” Additionally, based on Q&A 5077, where an inconsistency in validation rule v4797_m in template C 14.00 is raised, the provisions reported in column 0210 are referred to outstanding nominal amount at the reporting date. How should column 0210 be filled in case of traditional SRT securitisations, where the underlying assets are entirely derecognized and for which no provisions are recognized in balance sheet after the origination?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
  • ID: 2022_6558
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as Rejected Q&A: 29/06/2023