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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

Risk weighting under the Standardised Approach for credit risk for an exposure secured by a mortgage on a residential property which is a second home (for instance, a holiday home).

Can a second home be a residential property under Article 4(75) of Regulation (EU) No 575/2013 (CRR) and thus a respective mortgage benefit from the 35% risk weight under article 125(1)(a)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2641
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/01/2017

Recognition of minorities arising from an intermediate financial holding company

In the example below, are the minority interests of 20% in (mixed) financial holding company no. 1 – after applying the deductions according to Article 84 CRR – eligible for the consolidated own funds of the group?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2652
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 06/01/2017

Exposure secured by immovable property vs. secured by mortgages on immovable property

CRR requires the treatment of exposures secured by mortgages on residential property under the Standardised Approach (Article 124, 125, 126).Also CRR requires the treatment of exposures secured by immovable property collateral (Article 154(3)), and exposures secured by residential / commercial property (Article 164(4)), both under the IRB approach.(Regardless of the residential/commercial distinction), does the different formulation:- “mortgage on immovable property” (Article 124),- “exposure secured by immovable property collateral” (Article 154(3)),- “exposures secured by [residential / commercial] property” Article 164(4))refer to different kind of exposures?Q&A 1214 suggests that the scope is the same for all the three articles above.If however they are not the same, what sort of exposures are part of each group (and not part of another)? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2376
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/01/2017

Risk weight of exposures with QCCPs

Is it possible to use a risk weight according to Article 107(2)(a) of Regulation (EU) No 575/2013 (CRR) for trade exposures with a clearing member, where the institution is a client of a qualifying CCP, which is acting as a general clearing member of a non-qualifying CCP?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 528/2014 - RTS on non-delta risk of options in the standardised market risk approach
  • ID: 2015_2138
  • Topic: Market infrastructures
  • Date of submission:
  • Published as final Q&A: 06/01/2017

Eligibility of unconditional Financial Letters of Credit as eligible financial collateral

Can an unconditionally drawable Letter of Credit held by an institution as beneficiary be treated as a “cash assimilated instrument” eligible for inclusion by that institution as an item of Funded Credit Protection against an outstanding exposure position for a contingent future payment?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1917
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/01/2017

Supplementary transfers when using the sale of business tool

Does the power under Article 38(5) of Directive 2014/59/EU (BRRD) allow the resolution authority to make supplementary transfers even when the conditions for resolution are not met anymore?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2357
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 16/12/2016

Classification of SME/Retail Corporates as 'Retail Deposits'

To be eligible for Article 153(4) CRR, do firms need to have externally verified annual sales numbers, and if so how frequently should firms assess eligibility?

  • 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: 2016_2731
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 09/12/2016

Including in the LCR calculation deposits from this category with residual maturities longer than 30 days

Should banks include in the LCR calculation deposits from this category with residual maturities longer than 30 days? Should outflow rate (40%) be applied to all deposits from this category or only to deposits with residual maturities shorter than 30 days?

  • 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: 2016_2727
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 09/12/2016

Calculation of the predetermined amount for market making purposes

Which amount has to be taken into account in market making operations when the nominal amount of the repurchased CET 1 instruments , e.g. shares, is 1 EUR per share but the current market price which has to be paid for the repurchase of the share is higher, for example 20 EUR. Which amount has to be taken into account to compute the predetermined maximum amount for market making purposes for which a general prior permission has been granted by the competent authority (CA) according to the second subparagraph of Article 78(1) of Regulation (EU) No 575/2013 (CRR)?

  • 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: 2016_2852
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 09/12/2016

Requirements regarding „control” by the resolution authority

Are the requirements of “control” of the bridge bank (Article 40(2)(a)) and asset separation tool (Article 42(2)(a)) met if the conditions specified under Article 41(1) and Article 42(4) respectively are satisfied?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2345
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 09/12/2016

General credit risk adjustment (GCRA) inclusion into Tier 2 capital

For the purpose of the inclusion into institutions' Tier 2 capital and in the event of interim profits or year-end profits that have not been approved in accordance with Article 26(2) CRR (a.k.a. "interim GCRAs"), are the general credit risk adjustments (GCRAs) required to be immediately deducted from institutions' CET1 capital?Are "interim GCRAs" eligible as a Tier 2 capital regardless either the fulfilment of Article 26(2) of CRR, or without immediate reduction from CET1 capital?

  • 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: 2016_2807
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 09/12/2016

Calculation of the ratio variable to fixed remuneration

Is it possible to value Long Term Instruments, included in the variable component, according to the IFRS 2 as accounting standard?In particular, IFRS 2 requires fair value accounting including consideration of the optional character of the Long Term instruments. Is this allowed by CRD IV and EBA GLs on sound remuneration?The question refers specifically to the calculation of the amount of variable remuneration for the purpose of the compliance-check with regard to the 200% bonus cap as transposed in the national law. In particular it refers to the value to be used for instruments, Long Term Instruments, included in the variable component. Is it possible to value them, according to the IFRS 2 as accounting standard? In particular, IFRS 2 requires fair value accounting including consideration of the optional character of the Long Term instrument, i.e. taking into account probability criteria, e.g. by means of Monte Carlo simulation with regard to optional elements of the Long Term instrument (e.g. future performance of shares)?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2021/04 - Guidelines on sound remuneration policies under CRD (repealing EBA/GL/2015/22)
  • ID: 2016_2806
  • Topic: Remuneration
  • Date of submission:
  • Published as final Q&A: 09/12/2016

Break clauses in capital requirements and Residual maturity

In a swap contract with break clauses, basically with an enforceable option of early termination by one of the counterparties, which is the residual maturity to be considered for the application of the CVA capital charge in article 384 of CRR? The residual maturity of the original contract or the residual maturity for the break clause date?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2252
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 09/12/2016

Exclusion of intragroup transactions from own funds requirements for CVA risk

Shall intragroup transactions be excluded from the own funds requirements for CVA risk on a consolidated basis when the intragroup counterparty is established in a third country?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1929
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 09/12/2016

Calculation and Application of incurred CVA per Article 273(6)

We would like to clarify how the incurred Credit Valuation Adjustments (CVA) per Article 273(6) Regulation (EU) No 575/2013 (CRR) should be applied to the COREP templates. In particular:1. Should the CVA per Article 273 CRR be included in the calculation of Counterparty Credit Risk (CCR) Exposures? We believe it should be.2. If the CVA is applied to CCR exposures how should it be applied, before or after any Credit Risk Mitigation (CRM)?3. In the calculation of the CVA charge per Article 381 CRR (Meaning of credit valuation adjustment), which exposure should be used in the formula (Article 383 CRR Advanced Method):(a) E* the fully adjusted exposure value (per Article 220 CRR) including an adjustment due to the incurred CVA; or(b) E* the fully adjusted exposure value, but without the incurred CVA?4. In COREP template C 07.00 where should be apply the CVA per Article 273 CRR, column 010, 030 or somewhere else?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1544
  • Topic: Supervisory reporting
  • Date of submission:
  • Published as final Q&A: 09/12/2016

Correct application of credit conversion factors in relation to credit substitutes and shipping guarantees

According to Annex I Classification of off-balance sheet items:a) Paragraph 1. (a) guarantees having the character of credit substitutes are guarantees for the good payment of credit facilities. These guarantees bear full risk, therefore CCF of 100% is applied as stated in Article 111. Could you provide more examples or a definition of credit substitutes?b) Paragraph 2. (b). (i) shipping guarantees: could guarantees for payment of delivered goods and services be considered shipping guarantees?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2543
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 09/12/2016

EBA Benchmarking 2016

In template C 103.00 ”Details on exposures in High Default Portfolio”, column 230 and 240, it is demanded the RWA* and RWA**. For those purposes, we need to calculate a PD* and PD**. Our question is about how PD* must be estimated. In this sense we have read the specifications and we need more clarifications or be sure our understanding is correct.

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions (for benchmarking the internal approaches)
  • ID: 2016_2782
  • Topic: Supervisory reporting - Supervisory Benchmarking
  • Date of submission:
  • Published as final Q&A: 02/12/2016

Exemption from bail-in of emergency liquidity assistance provided by the central bank

Does the BRRD provide for any exceptions from bail-in as regards liabilities from emergency liquidity assistance provided by the central bank before the institution is in resolution?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2435
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 02/12/2016

Clarification on the applicable framework for public recapitalisation

We would like clarification on the applicable framework for public recapitalisation which is not classified as precautionary recapitalisation accordingly to Article 32(4)(d)(iii) of Directive 2014/59/EU (BRRD), in particular i) its relation to Government Financial Stabilisation Tools, and ii) differences in rules applicable in 2015 and from 2016 onwards.

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2178
  • Topic: Resolution objectives and triggers
  • Date of submission:
  • Published as final Q&A: 02/12/2016