Response to consultation on Guidelines on limits on exposures to shadow banking

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4.Do you agree with the approaches the EBA has proposed for the purposes of establishing aggregate and individual limits? If not, please explain why and present possible alternatives.

If relevant entities were to be considered as SB entities (cf. answer to question 1) and in order to avoid burdensome procedures, AFG would suggest having a limit at aggregate level. Monitoring of individual exposures should exist, but we do not think that individual limits should be required.

5. Do you agree with the fallback approach the EBA has proposed, including the cases in whichit should apply? If not, please explain why and present possible alternatives. Do you think that Option 2 is preferable to Option 1 for the fallback approach? If so, why? In particular: Do you believe that Option 2 provides more incentives to gather information about exposures than Option 1? Do you believe that Option 2 can be more conservative than Option 1? If so, when? Do you see some practical

It’s hard to agree or disagree with the fall back approach, as there is no justification as to why the 25% limit woud be relevant. For the same reasons, it is hard to assess whether option 1 or 2 would be more relevant.
If and only if the relevant entities were to be identified as SB entities (cf. answer to question 1), AFG would support the principal approach.

6. Taking into account, in particular, the fact that the 25% limit is consistent with the currentlimit in the large exposures framework, do you agree it is an adequate limit for the fallback approach? If not, why? What would the impact of such a limit be in the case of Option 1? And in the case of Option 2?

See answer to question 5.

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Name of organisation

Association Française de la Gestion financière (AFG)