Submission #4

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European Banking Federation

Question 1: (The question is relevant with regard to the RTS and the guidelines): Are there further elements of a credit assessment which would be useful in this context when assessing whether the financial support is expected to redress the financial difficulties of the receiving entity and the further conditions (e.g. the terms of the provision of the support and the prospect of the payment of consideration and repayment)? Please specify. No comment.

See general comments in attached document.

Question 2: (The question is relevant with regard to the RTS and the guidelines): How could the interest of the providing entity and the group as a whole be measured and reflected in the terms of the provision of the support? What information could be used to inform the assessment of the terms, also with respect of non-quantifiable costs and benefits?

See general comments in attached document.

• Past performance of receiving entity can be used for assessment.
• Reputational impact of allowing a subsidiary to fail should be considered.

Question 3: What rules do you deem appropriate for capital requirements? Do the criteria reflect an adequate balance between the interest of the group as a whole and safeguards required for the individual entities? Are there additional criteria that should be considered?

See general comments in attached document.

• Maintaining BAU capital limits e.g. large exposures will limit the amount of group support that can be provided.

Question 4: How will the rules for capital requirements, in particular regarding upstream support, impact management decisions on the structure the group? If you see a negative impact, how could this be mitigated?

See generalcomments in attached document.

• As above, authorities should consider allowing temporary breaches of ratios to enable provision of group support to the extent required by receiving entity.

Question 5: What rules do you deem appropriate for liquidity requirements? Do the criteria reflect an adequate balance between the interest of the group as a whole and safeguards required for the individual entities? Are there additional criteria that should be considered?

See generalcomments in attached document.

• See comments for questions 3 and 4

Question 6: How will the rules for liquidity requirements, in particular regarding upstream support, impact management decisions on the structure the group? If you see a negative impact, how could this be mitigated?

See generalc omments in attached document.

• The rules may encourage regional funding models vs. centralised funding models. This needs to be considered in context of appropriate resolution strategy (ie SPE or MPE)

Question 7: Should a description of additional terms be disclosed? Are there any elements that in your view should not be disclosed? See general comments in attached document.

No comment.

Upload files EBF_011890 - EBF Response to EBA-CP-2014-30 RTS on conditions for group financial support v2 clean.docx

Name of organisation European Banking Federation