Search for Q&As

Enquirers can use various factors to search for a Q&A:

  • These include searching by the Q&A ID; legal reference, date submitted, technical standard / guideline, or by keyword if known.
  • Searches can be extended to more than one legal act, topic, technical standard or guidelines by making multiple selections (i.e. pressing 'Ctrl' on your keyboard, and selecting the relevant ones from the drop-down lists by left mouse-click).

Disclaimer:

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.

Final Q&As Q&As under review Rejected Q&As Archived Q&As All Q&As

List of Q&A's

Appropriate Risk Weight for purchased defaulted assets

Where an entity subject to the CRR purchased Non-Performing Loans booked at the purchase price (net book value, “NBV”), which is significantly below the loans’ gross book value (“GBV”), can the difference between GBV and NBV be treated as specific credit risk adjustment when deciding whether a risk weight of 100% (rather than 150%) applies according to Article 127 CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 183/2014 - RTS for the calculation of specific and general credit risk adjustments
  • ID: 2017_3270
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 21/09/2018

Investment firms’ exposures to credit institutions

Should MIFID investment firms which are subject to the CRR calculate the credit risk requirement for the clients’ funds (i.e. cash) deposited in a credit institution?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3422
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 03/08/2018

General and specific credit risk adjustments

Can a Supervised Entity not recognise changes in impairments, value adjustments or provisions in the calculation of the exposure value and thus avoid the deduction of these amounts from CET1?Or in case a Supervised Entity has changes in impairments, value adjustments or provisions, are these amounts automatically labelled as general or specific credit risk adjustments and shall therefore be accounted for in the calculation of the exposure value of an asset and deducted from CET1? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 183/2014 - RTS for the calculation of specific and general credit risk adjustments
  • ID: 2017_3330
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 03/08/2018

Original maturity for off balance sheet items

How is the "original maturity" identified for items in CRR Annex 1 (2)(b)(ii)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3366
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 08/06/2018

Multiplier of 1.25 to the asset value correlation

In case of an exposure to a regulated financial sector entity which does not meet the requirements to be treated like a large financial sector entity (with total assets of less than 70 billion of euros), but which is owned by a regulated large financial sector entity which meets those requirements, does the multiplier of 1.25 to the asset value correlation apply for that exposure?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_3057
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 08/06/2018

Classification as off-balance sheet items of a committed reverse repo facility or other committed credit facilities where drawing under the facility is conditional upon purchasing or receiving eligible collateral

Would it be possible for an institution to assign a committed reverse repo facility, or other committed credit facility where drawing by the client is conditional to purchasing or receiving eligible collateral by the institution, to one of the risk categories as “other items also carrying [low], [medium/low], [medium] risk and as communicated by EBA”, in accordance with Article 111(1) CRR or Article 166(10) CRR and Annex I?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3332
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 24/11/2017

CCF for uncommitted lines

Can uncommitted guarantee/letter of credit lines be classified as low risk under Annex I, point 4 letter (c) CRR? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3246
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 24/11/2017

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

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

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

Treatment of an institution’s guarantees for investments into CIUs

In case of an institution’s guaranteeing the amount of a customer’s original investment into a CIU and a minimum yield:1. To which risk category for off-balance sheet items in Annex I CRR shall these guarantees be assigned, in particular shall this assignment depend on any risk mitigation techniques used by the CIU?2. Shall these guarantees be treated as an exposure in the form of units or shares in a CIU, which would in particular allow the institution to look-through to the underlying exposures of the CIU, provided the conditions for looking-through are met?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2971
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/10/2017

Risk weight for the credit risk for third countries with supervisory and regulatory arrangements at least equivalent to those applied in the Union according to Article 114(7) CRR

If a third country has supervisory and regulatory arrangements at least equivalent to those applied in the Union (such as Turkey) what risk weight for the credit risk is assigned to the exposure of this country?For example, when the Turkish competent authority assigns a 0% risk weight to the credit risk of Turkey, can this risk weight be used by a German bank? What happens when Turkey issued bonds in EUR, USD, JPY and TKY? How is the difference in the risk weight in the case the Turkish competent authority assigns a 0% risk weight to all bonds?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3262
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 22/09/2017

Computation of discount for purchased assets

How does the treatment described in the last subparagraph of Article 166(1) CRR interact with that of Article 159 CRR? How does the definition of discount/premium apply in prudential treatment of exposures?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2691
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 21/07/2017

Risk weight of EURATOM debt

Which risk weight shall apply to outstanding/new EURATOM debt instruments?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3204
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 14/07/2017

Risk weight to apply to exposures to unrated central banks

What risk weight should be assigned to exposures to the central bank of a non EU-member country when the central bank does not have a credit assessment by a nominated ECAI (i.e., it is unrated)? Would it be appropriate to assign a risk weight of 100% to exposures to said central bank, independently of the rating of the central government?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3231
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 14/07/2017

Speculative immovable property financing

Should the loans that banks grants to build a first home, as a part of the normal business process, where the repayment of the financing comes from the sale of the property to the first buyer, without a speculative purpose of resale, and on the basis of the credit risk valuation of the borrower’s financial strength, be considered as speculative immovable property financing under Article 4(1)(79) CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3131
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 30/06/2017

Use of bona fide estimates for the determination of the size of a corporation

Is it allowed to use bona fide estimates for the determination of the size of a corporation for the purposes of Articles 153(4) or 162(4) CRR (identification of SMEs) analogous to Article 4(3) of the Annex Commission Recommendation 2003/361/EC? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_3049
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 30/06/2017

Contingent liabilities within the Merchant Services Industry

Does the contingent liability to which an acquiring bank is subject in the course of the merchant acquirer business qualify as an off-balance sheet item according to Annex I  CRR? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2916
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 30/06/2017

Valuation of immovable property performed by statistical model

Does the reference to the independent valuer in Article 229(1) and Article 208(3)(b) of Regulation (EU) No 575/2013 (CRR), permit the recognition of a statistical model of property valuation, the outcomes of which are periodically verified by other independent valuer, as independent valuer?Does the reference to the independent valuer in Article 229(1) and Article 208(3)(b) CRR permit that before a credit decision, a property would be evaluated by a statistical model, the outcomes of which are periodically verified by another independent valuer, without additional confirmation by an independent valuer for each property valuation made by a model?Does the reference to the independent valuer in Article 229(1) and Article 208(3)(b) CRR permit that before a credit decision, a property would be evaluated by a statistical model, where outcomes of a model are periodically verified by another independent valuer, and there is an additional confirmation or correction for the each statistical valuation, after a credit decision by another independent valuer? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2017_3078
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 12/05/2017