Question ID:
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Credit risk
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Disclose name of institution / entity:
Type of submitter:
Competent authority
Subject Matter:
Classification of Churches and Religious Communities

Will the exposures of churches and religious communities that do not fall under Articles 115 (3), 127, and 128 be classified as Corporates (Article 122) or Retail (Article 123)? Additionally, can these be classified as SMEs?

Background on the question:

Article 115(3) CRR states how to treat exposures that can raise taxes in accordance with legislation conferring on them the right to do so. However, it does not indicate how to treat all other exposures.

Date of submission:
Published as Final Q&A:
Final Answer:

For a classification as Retail exposures according to Article 123 of the CRR all the requirements mentioned in letters (a) to (c) of the first subparagraph of Article 123 have to be met, which includes the requirement that the exposure "shall be one of a significant number of exposures with similar characteristics such that the risks associated with such lending are substantially reduced".

Where exposures to churches and religious communities that do not fall under Articles 115(3), 127, and 128 of Regulation (EU) No 575/2013 (CRR) cannot be assigned to any other exposure class, they should, for the purposes of the calculation of risk-weighted exposure amounts, be risk weighted under the Standardised Approach according to Article 113(5) of the CRR. Notwithstanding the risk weighting, these exposures should, for the purposes of complying with Article 112, be assigned to exposures to corporates under point (g).

To the extent that the requirements of Article 501 are met, the SME discount factor should be applied.

Final Q&A
Answer prepared by:
Answer prepared by the EBA.
Note to Q&A:

Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR) and continues to be relevant.