FBF would welcome clarification on the perimeter of entities included in the formula of paragraph 5 point (b).
The RTS indicates in the paragraph 6 of the Article 1: “For the purposes of paragraph 5, point (b), where no waiver has been granted in accordance with Part One, Title II, Chapter 2, Sections 2 and 3 of Regulation (EU) No 575/2013, and no additional own funds requirement has been imposed on an entity on an individual basis, the additional own funds requirement of that entity shall be zero."
For our members there is an ambiguity within the initial formulation, whereby it seems that some entities could be completely excluded of the formula defined in paragraph 5 (b) of the same Article. Indeed, with the current drafting, one could wonder whether an entity benefiting from a solvency waiver (defined in the Articles 7 to 10 of the CRR) could be completely taken out of the formula, both on the numerator and denominator. Besides solvency waivers are not defined in Part One, Title II, Chapter 2, Sections 2 and 3 of CRR but in Part One, Title II, Chapter 1.
Paragraph 6 should make it clear that the RWAs of all entities within the resolution group remain accounted in the denominator in the formula of paragraph 5 (b), including both entities benefiting from a solvency waiver, and entities for which no additional own funds requirement was set, i.e. with a level of additional own funds requirement equal to zero.
6. “For the purposes of paragraph 5, point (b), where no additional own funds requirement has been imposed on an entity on an individual basis, the additional own funds requirement of that entity shall be zero."
EBA’s position regarding the systemic buffer is to include it in the recapitalization amount by default (in the Market Confidence Charge). For our members, this assumption seems to be excessive and should not be automatic because:
- It is not granted that the group after a resolution will still be systemic.
- The authority should not necessarily put the MCC at the maximum level provided by the text.
RTS should be consistent with the Level 1 text (Article 45b) and leave a possibility to Resolution Authorities to define a lower level of systemic buffer in case of RWA decrease.