We wonder about the consistency of FINREP Validation rule v5116_m.

v5116_m: [F 13.01] sum({F 13.01, r050, (c010-050)}) <= {F 05.01, r120, c060} - Value Inconsistency : F13.01 r050, (c010-050) = Maximum amount of the collateral or guarantee that can be considered for lending for house purchase; F 05.01, r120, c060 = Carrying amount for lending for house purchase - Scope of lending inconsistency : F13.01 r050, (c010-050) = only lending for house purchase with collateral or guarantee; F 05.01, r120, c060 = lending for house purchase with or without collateral or guarantee - Economic agents inconsistency : F13.01 r050, (c010-050) = all agents ; F 05.01, r120, c060 = Households

The inconsistency in validation rules may prevent us to respect them

The validation rule (non-blocking) checks if the carrying amount of the credit granted to households for house purchase in template F05.01 is bigger or equal to the maximum amount of collateral that can be considered for the credit granted for house purchase (F13.01).

Following Annex V, part 2, paragraph 172 of Regulation N°680/2014, in template 13.1, the ‘maximum amount of the collateral or guarantee that can be considered’ shall not exceed the carrying amount of the related loan. Therefore, the validation rule holds irrespectively of whether there is lending for house purchase with or without collateral or guarantee, as in any case the collateral should be equal or smaller.

In addition, Annex V. Part 2.88(b) of Regulation N°680/2014, indicates that “‘Lending for house purchase’ shall include credit extended to households for the purpose of investing in houses for own use and rental, including building and refurbishments”, therefore, the validation rule holds as the counterparties in templates F05.01 and F13.01 are households.