Question ID
2017_3649
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Credit risk
Article
134
Paragraph
4
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
Article 134 paragraph 4 of CRR
Type of submitter
Credit institution
Subject matter
Credit Risk on Gold Bullion
Question

Under Article 134(4) CRR, what would the risk weight be if gold bullion is held on our behalf by other institutions and where such investment is not backed by gold bullion liabilities?

Background on the question

Pursuant to Article 134(4) CRR, gold bullion held in own vaults or on an allocated basis to the extent backed by bullion liabilities shall be assigned a 0 % risk weight.

Submission date
Final publishing date
Final answer

In accordance with Article 134 (4) of the Regulation No 575/2013 (“CRR”), gold bullion, whether held in own vaults or on an allocated basis, is subject to a 0% risk weight only to the extent that it is  backed by bullion liabilities. Where the conditions in Article 134(4) CRR for a 0% are not met, it constitutes an exposure to the entity holding the gold bullion and consequently the risk weight to be applied is that for a delivery obligation of the other entity on this gold bullion.

This answer is without prejudice to the application of market risk capital requirements for gold in accordance with Article 92(3)(c) CRR.

Status
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.

Disclaimer

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