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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

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

Definition of private equity exposures in articles 155(2) and 155(3)

Do “private equity exposures in sufficiently diversified portfolios” eligible to a Risk Weight (RW) of 190% in simple risk weight approach in article 155(2) and a PD of 65% in the PD/LGD approach in article 155(3) refer to any non-listed equity instrument and/or shares in a CIU or units in a CIU for which the underlying exposures are non-listed equity instruments, provided that they are part of a sufficiently diversified portfolio?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4774
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Clarification about the definition of default for retail exposures

It is unclear how to determine what should be considered as retail exposures for the purpose of the definition of default for retail exposures.What kind of exposures should be considered to determine default under Article 178 CRR?

  • 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: 2019_4757
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Recognition criteria for off-balance sheet items for exposure value calculation

If based on the applicable accounting framework (IFRS-EU) it is concluded that there is no contingent liability that should be disclosed for accounting purposes, is it then still possible that an off-balance sheet item exists, which should be recognised for exposure value calculation per Articles 111 CRR or 166 CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4751
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Specialised Lending - Interpretation of contractual arrangements that give the lender a substantial degree of control

How shall Article 147 (8)(b) CRR be interpreted when identifying ‘contractual arrangements that give the lender a substantial degree of control over the assets and the income that they generate’ in the context of real estate financing?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2019_4672
  • Topic: Credit risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022