Response to consultation on Guidelines on large exposures breaches and time and measures to return to compliance
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EAPB members are public and promotional banks across Europe. These publicly owned and guaranteed institutions foster local economic development by funding SMEs, infrastructure and various green and social projects. Additionally, our members are also very active in providing financing to local and regional governments, acting as a catalyst for public investment at the local level. Exposures which are currently, based on CRR Article 400, exempted from the large exposure amount. Hence, changes to these exemptions will have a significant impact on our members.
Question 4: In particular on the criterion “reasons beyond control of the institution”, do you think that the cases included in the guidelines reflect accurately current practices?
Though our understanding is that the list in paragraph 22 is not meant to be limited given the wording at least, we think it would be useful to clarify that a merger between counterparties/clients resulting in a breach of the large exposure limit is also deemed to be an event beyond the control of the institution and hence to add this to the list.Question 7: What cases could justify a period longer than one year to return to compliance?
The draft proposal seems to suggest that changes in legislation are captured under exceptional circumstances and hence should be dealt with according to the guidelines. Given the substantial impact on the EAPB members we think such a change warrants a time period well beyond one year.EAPB members are public and promotional banks across Europe. These publicly owned and guaranteed institutions foster local economic development by funding SMEs, infrastructure and various green and social projects. Additionally, our members are also very active in providing financing to local and regional governments, acting as a catalyst for public investment at the local level. Exposures which are currently, based on CRR Article 400, exempted from the large exposure amount. Hence, changes to these exemptions will have a significant impact on our members.