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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

Validation rules v4764_m, v4765_m, v4766_m, v4767_m and v4768_m in template C 08.01

Are validation rules v4764_m - v4768_m correct?

  • 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Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)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: 2017_3350
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as final Q&A: 17/11/2017

v4760_m & v4761_m in C 02.00 and C 08.01

Are validation rules v4760_m & v4761_m correct?

  • 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Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)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: 2017_3347
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as final Q&A: 17/11/2017

Grandfathering of own funds instruments

For application of the grandfathering rules defined in Article 484 CRR and following, does the change in debtor resulting from a merger means that a new capital instrument has been issued and that its eligibility for grandfathering or for full eligibility as an own fund instrument should be assessed at the date of the merger or should one use the initial characteristics of the bond?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3299
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 17/11/2017

On-site inspections by resolution authorities

Does Article 63(1)(a) enable resolution authorities to carry out on-site inspections to gather relevant information?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3572
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 10/11/2017

Difference between taking control and being able to exercise the control

What is the difference between taking control over the institution and being able to exercise the control?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3571
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 10/11/2017

Reference to Article 49 in Article 63(1)(k)

Is the reference to Article 49 in Article 63(1)(k) only related to the close out and termination of derivatives? Is the power to close out and terminate financial contracts valid for the purposes of applying all the Directive and not only Article 49?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3558
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 10/11/2017

Difference between a reduction to zero and a cancelation

Can you explain what is the difference between a reduction to zero and a cancelation referred to in Article 63(1)(e), (g) and (h) of Directive 2014/59/EU (BRRD)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3557
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 10/11/2017

Powers of resolution authorities Article 63 and Article 38(1)(a)

Both Article 63 and Article 38(1)(a) of Directive 2014/59/EU (BRRD) make reference to powers of resolution authorities. How do these powers complement one another?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3556
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 10/11/2017

Notification of model changes

Does an alignment of the quantification of default to the default frequency based on an approved method (i.e. an update to the PD scale to better mirror the default frequency) require a notification? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 529/2014 - RTS on materiality of extensions and changes in the advanced approaches (IRB and AMA)
  • ID: 2015_2468
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 03/11/2017

Deposits received and deposits posted as margin collateral for derivative exposures

Under Article 21 of Commission Delegated Regulation (EU) 2015/61: 1. Is the treatment of cash collateral received and cash collateral posted symmetrical in C73.00 and C74.00 in line with the answer given in Single Rulebook Q&A 2014_1089, which specifically referred to LCR C52.00 and C53.00? 2. Does the phrase “…collateral to be received” mean collateral already received at the reporting date?

  • 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: 2017_3163
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 03/11/2017

Qualifying own funds included in consolidated own funds

Should an institution which has issued Additional Tier 1 (AT1) and Tier 2 (T2) instruments to external investors, and which is subject to consolidated supervision on the basis of the consolidated situation of its immediate parent financial holding company, apply the restrictions on the consolidated inclusion of AT1/T2 instruments issued by subsidiaries as provided for in Articles 82 and 85-88 of the CRR, where the parent holding company’s only assets are the shares in the institution?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3329
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 03/11/2017

Commitment to buy newly issued shares and synthetic holding deduction

What would be the prudential treatment applicable to a financial instrument where a bank commits itself to buy newly issued shares of an insurance company for a given amount should certain events occur?

  • 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: 2017_3292
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 03/11/2017

Section 3(a)(2) guarantees - eligibility for MREL

Can debt securities issued under a Section 3(a)(2) bank note program where the guarantor is a branch of the issuer be deemed to meet the criteria of article 45 of the BRRD in order to be included in the amount of own funds and eligible liabilities?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2966
  • Topic: MREL
  • Date of submission:
  • Published as final Q&A: 27/10/2017

Sliding scale method

We would prefer to apply the "sliding scale" method mentioned in EBA/GL/2015/10, but a strict interpretation of the methodology within the guidelines prevents the use of the whole defined scale.Would it be in compliance with the Guidelines to adjust the formulas in order to achieve ARW along the whole defined scale? And what adjustment would be preferable?

  • Legal act: Directive 2014/49/EU (DGSD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2015/10 - Guidelines on methods for calculating contributions to deposit guarantee schemes
  • ID: 2017_3095
  • Topic: Funding provisions (financing means, use of funds, borrowing, calculation of contributions)
  • Date of submission:
  • Published as final Q&A: 20/10/2017

Cost of living of legal persons

Do legal persons (for instance businesses like SMEs) have a “cost of living”?

  • Legal act: Directive 2014/49/EU (DGSD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2908
  • Topic: Rights of depositors (Eligibility, coverage level, repayable amount, repayment, claim against DGS, depositor information)
  • Date of submission:
  • Published as final Q&A: 20/10/2017

The question relates to systemic risk buffers and whether they can be additive

According to Article 134 CRD can two systemic risk buffers (SRBs) be additive e.g. in situations where a home country already has a SRB in place and wants to reciprocate a SRB from another Member State?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3229
  • Topic: Other issues
  • Date of submission:
  • Published as final Q&A: 13/10/2017

Minority Interests

In relation to the calculations mentioned in Article 81 CRR, does the information relating to a subsidiary have to be calculated before or after the consolidation process of that subsidiary in the group?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3111
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 06/10/2017

Capital requirements deduction for credit risk on exposures to SMEs

Further to Q&A 2135 and Q&A 2268, can the capital requirement deduction (SME factor) be applied for speculative immovable property financing (Corporates) if conditions determined in Article 501(1) and (2) of Regulation No 575/2013 (CRR) are met?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_3012
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/10/2017

Deduction from own funds of items entered as assets that are not yet included within equity

If an institution enters an asset (e.g. at Equity valuation of a holding in a Financial Sector Entity (FSE) or increasing the amount of a deferred tax asset) through the profit and loss statement (P&L), the corresponding profit is not eligible for own funds before it is audited and officially approved (or in case of interim or year-end profits before it is audited and recognition is approved by the competent authority).However, the deduction amount (e.g. holdings in FSE or DTAs) has formally increased and would lead to an immediate higher deduction amount. If this was the case, it would represent the deduction of gains that are not yet recognized in the own funds of the institution. 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2544
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 06/10/2017

Documentary credits in which underlying shipment acts as collateral and other self-liquidating transactions

Does a documentary credit secured by an assignment, assignment for security and/or pledge of the underlying sales contracts with payment to be effected to an account pledged in favour of either the lender (i.e. L/C issuing bank) or the security agent (especially in case of a syndicate) satisfy the condition of Annex 1 (3) (a) (i) CRR that “the underlying shipment acts as collateral or that the transaction is otherwise self-liquidating”?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3171
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/10/2017