COREP template C 17.00 – OPERATIONAL RISK: GROSS LOSSES BY BUSINESS LINES AND EVENT TYPES IN THE LAST YEAR (OPR Details) summarises the information on the gross losses registered by an institution in the last year according to event types and business lines, based on the first accounting date of the loss.What we would like to clarify, is the treatment of incidents that span more than one year, and consequently get recorded in the books of the institution in parts for several years. The question is whether the amount included in this table should be the incremental amount (i.e. the amount that was recorded for an incident only in the last 12 months from the report date, and which could mean positive amounts, due to possible reversals of previous provisions) or if it should be the sum of the amounts (i.e. cumulative amount) recorded for that incident over all the years, including the latest amount which was recorded in the last 12 months.Please find here three examples illustrating the above question, for which we would like a clarification:An operational loss event (e.g. a lawsuit against the bank where the probability of a negative outcome is >50%) that was recorded (date of input) in 2009 with an initial estimated loss amount (Potential Loss) of € 300 (28/01/2009).30/11/2011The estimated loss amount has been increased by € 200 to € 500Question: 30/11/2011 and next 12 months, should they report € 200 or € 500?At final Settlement (30/06/2014):Case 1:Case closed – final settlement – The bank paid € 400 (favourable)Question: 30/06/2014 and next 12 months, should they report - € 100 (negative) or € 400?Case 2:Case closed – final settlement – The bank paid € 600 (unfavourable)Question: 30/06/2014 and next 12 months, should they report € 100 or € 600?A fraud incident that was recorded (date on input) in 2010 with an initial loss of € 80 (25/05/2010).02/02/2011 – the loss has been increased by € 50 to € 130.Question: 02/02/2011 and next 12 months, should they report € 50 or € 130?Incidents that are recorded (date of input) with an initial loss amount lower than € 1000 (Lowest threshold) but their loss amount is rising above € 1000 in the subsequent years.Question: How should this be treated? Should the full amount of the loss appear on the first time the incident is reported?
- 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Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)