We understand the scope of application as being the FINREP category loans and advances and not debt securities, which contains credit risk relevant assets classified at AAC (at amortized cost) or FVOCI (fair value though other comprehensive income).

In light of the need to have an IFRS 9 compliant bank at the beginning of January 2018 this would seem appropriate. However we would mention two aspects. Firstly, by this date we will have tested our systems for over a year, however this is no substitute for live testing which, in the past, has shown to provide significant insights. Furthermore, it will take time for new IFRS 9 related internal governance processes to establish themselves on an operating level, a process which can only really start after 1 January 2018. Secondly, we expect an emergence of new trends in best practice in critical areas such as significant increase of credit risk (SICR). In this respect we expect an increase in positive inputs during 2018, i.e. the disclosures of our peer banks, discussions with auditors and regulators. Also in case of major change request the application of the guidelines might be postponed to a later date or at least there should be sufficient transitional rules.

We very much welcome the inclusion of the proportionality approach as it reflects the real heterogeneity which exists in the European banking industry. In this respect we would strongly urge to explicitly include less developed markets" as one of the criteria. One example of this is the use of forward looking information. The degree of availability and robustness of macroeconomic indicators varies from country to country. Another example is that the banks using STD or FIRB approach might need to additionally focus on development of some of the credit risk parameters during the implementation time."

We agree with the impact assessment and baseline scenario and welcome the strong intention of the regulator to create a level playing field. For us the benefits are clear and hence the appropriate level of funds has been devoted to the project.