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Q&As refer to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.

Please note that the Q&As related to the supervisory benchmarking exercises have been moved to the dedicated handbook page. You can submit Q&As on this topic here.

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List of Q&A's

How are branches included in the scope of resolution funds?

1) What does "Union branches" mean in DR 2015/63: (i) all branches of credit institutions active in the Union regardless of the jurisdiction in which they are established (ii) all branches of credit institutions that are established in the Union (iii) all branches of credit institutions that are established in the EEE? 2) Non-EEE branches are not mentioned in the DR 2015/63. Does that mean that they are excluded from the scope of this regulation or does that mean that they are included as any other 1cinstitutions 1d, as defined in Article 2 §1 23) of BRRD? - If they are included, does that mean that, as the SRB does not include them in the SRF, NRA should include them in their national schemes? - If they are excluded, how will a level playing field among banking entities be guaranteed? 3) Recitals 1 and 2 of DR 2015/63 mention the need of a special framework for EU-branches and even mention a specific delegated act. Is there any project in that field?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/63 - DR on ex ante contributions to resolution financing arrangements
  • ID: 2016_2605
  • Topic: Cross-border resolution
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Clarification on the Geographical Area breakdown

Is the list of Geographical areas (countries, macroregions) of the template C 103.00 of Annex I complete? Some relevant EU countries are omitted, like Spain. Other non EU relevant countries in term of exposures like US are omitted too. Is there any materiality threshold below which portfolios corresponding to certain Geographical Areas should not be included in templates C 103.00 and C 105.02 of Annex III?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions (for benchmarking the internal approaches)
  • ID: 2016_2600
  • Topic: Supervisory reporting - Supervisory Benchmarking
  • Date of submission:

Treatment of retail exposures secured by property under IRB

How should institutions treat a retail exposure for an SME that has a minor property collateral (and thus it is partly secured by immovable property) but the purpose of this loan is not property/mortgage finance? Are the correlation coefficient prescribed in Article 154(3) and the minimum LGD requirement in Article 164(4) applicable for the full exposure?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2599
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 18/11/2016

Reporting of initial margin posted in the context of derivative transactions and contribution to default funds to CCPs

Where should assets which a bank has posted on its own behalf as initial margin in the context of derivative transactions and contribution to default funds to CCPs be reported in the template C 60.00?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2016_2598
  • Topic: Supervisory reporting - Liquidity (LCR, NSFR, AMM)
  • Date of submission:
  • Published as final Q&A: 15/04/2016

Expected outflows from derivatives

Could a designated/purpose-specific transaction structure consisting of two Total Return Swaps (“TRS”) on the same underlying basket of non-HQLA eligible equities with the same non-bank market counterparty where one physically settled TRS delivers the performance of the equity basket to the counterparty until the point in time when the bank elects to early terminate the transaction and the other cash settled TRS delivers the performance of the equity basket to the bank until maturity be treated as a net derivative inflow for the bank, within the LCR according to Article 32(5) of Delegated Regulation (EU) 2015/61?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement
  • ID: 2016_2595
  • Topic: Liquidity risk
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

CRD Art. 140(4) in conjuction with CRR Art. 327 and CRR Art. 112

For the purpose of reporting as per point 3.4.3.2 of Annex 2 (Annex 2 of EC Implementing Act on Reporting) page 109 ''Own funds requirements for relevant credit exposures, trading book exposures and securitisation exposures in accordance with Article 140(4) CRD and determined in accordance with Part Three, Title II and Title IV of the CRR'' , are the referred CRR Art 112 restrictions under CRD Art 140(4) applicable also to IRB and also specifically for the purpose of point (b) Art 140(4) do the restrictions of CRR Art. 112 apply considering CRR Art. 327?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions (for benchmarking the internal approaches)
  • ID: 2016_2594
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 11/02/2022

Recognition of unfunded credit protection / guarantees under Advanced IRB

Does an institution which has been granted permission to use the IRB Approach, including to use own estimates of LGD and conversion factors have the option to use the credit risk mitigation techniques of Chapter 4 (general CRM rules) of Regulation (EU) No 575/2013 (CRR), or must it make adjustments using its own estimates?Do the requirements for recognition of CRM under Chapter 4 apply to AIRB firms, or are these superseded by the Chapter 3, Section 6 requirements for IRB firms, including Article 183 CRR regarding recognition of unfunded credit protection for AIRB firms?For the purposes of Art 161(3) CRR, how does one determine the relevant risk weight of "a comparable, direct exposure to the guarantor"? Art 161(4) CRR gives guidance, but this is specifically with regard to the application of Art 153(3) CRR, i.e.: the "double default" approach. Is Art 161(4) CRR also relevant for Art 161(3) CRR?Is the "double default" approach detailed in Art 153(3) CRR and in Chapter 4 (Articles 202 and 217 CRR) also available for AIRB firms?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2593
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 20/01/2017

Use of financing arrangement for covering the gap between transferred assets and liabilities in case of application of the sale of business tool

In light of Article 101(1) of the BRRD, is the resolution authority authorised to use the financing arrangement to finance the gap between all the purchased assets and liabilities, by the means of a direct grant/subsidy, in the amount of the negative difference between the assets and liabilities under a condition that the contribution is compliant with the Union State aid framework?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2591
  • Topic: Resolution financing arrangements
  • Date of submission:
  • Published as final Q&A: 30/09/2016

Netting set treatment for trades with Specific Wrong Way Risk

For a netting set with three OTC derivative trades (trades A, B and C), Trade A is identified existing Specific Wrong-Way Risk. The underlying collateral was assigned in trade level, namely collateral 1, 2 and 3 allocated to trade A, B and C respectively. When removing trade A from the netting set and treated as a separate netting set, shall the underlying collateral be considered?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2590
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 18/11/2016

Reporting of assets sold short as a additional outflow for LCR under Delegated Act

For the purposes of reporting additional outflow for short positions in the LCR (row ID 1.1.45.6.2) on the C73 return, are firms required to report both unsettled and settled uncovered sold short positions?  

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement
  • ID: 2016_2585
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 08/02/2019

Two separate ex-ante valuations for resolution purposes

In case two separate ex-ante valuations for resolution purposes have been prepared, each of which covering different purposes as per Article 36(4) of Directive 2014/59/EU (BRRD), shall both be treated as a part of the valuation and, therefore, the decision on resolution? Should they both be subjected to judicial review in line with Articles 36(13) and 85 BRRD?On a related note, can a resolution authority's decision be appealed if it does not include a decision on a specific resolution action to be taken?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2584
  • Topic: Valuation
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Use of valuation to apply resolution tools and to initiate resolution

Why is valuation part of the decision on application of resolution tools instead of the decision initiating resolution?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2583
  • Topic: Valuation
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Difference between the two references in Articles 23(1)(d) and 19(5)(b)

Could you please provide additional clarifications on why there is a difference between the two references mentioned below (between Article 23(1)(d) and 19(5)(b)) and also on what is meant by “form of security” in Article 23 (1)(d)?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2582
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 05/02/2016

Interpretation of Article 19(2)

Chapter III of Directive 2014/59/EU (BRRD) does not apply to intra-group financial arrangements including funding arrangements and the operation of centralised funding arrangements provided that none of the parties to such arrangements meets the conditions for early intervention. In our opinion this means that in the moment when one member of centralised funding arrangement meets conditions for early intervention the Chapter III of Title II (i.e. the chapter which regulates Intra Group Financial Support) starts to apply to the centralised funding arrangement. From that moment providing any intragroup financing to the member which meets the conditions for early intervention is only possible if, inter alia: - • conditions set by Article 23 BRRD are met and • providing of such financing is notified to the supervisory authority and approved by that authority as required by Article 25 BRRD. Is our understanding correct?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2581
  • Topic: Intra-group financial support
  • Date of submission:
  • Published as final Q&A: 05/02/2016

Amendments to Article 19

Could you please clarify Article 19(1) and (2) of Directive 2014/59/EU (BRRD)? The words “that meets the conditions for early intervention pursuant to Article 27” in Article 19(1) were added to the original draft of the BRRD), in addition to the insertion of Article 19 (2), which provides that the Intra Group Financial Support (IGFS) chapter does not apply if ”none of the parties” meets the conditions of early intervention. The addition to the original draft refers to “arrangements” rather than “agreements”. We understand “arrangements” to be broader, and to refer to arrangements of any kind. Only a subset of these, called ”group financial support agreements” are regulated by the BRRD. Does this variation in terminology affect implementation?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2579
  • Topic: Early intervention
  • Date of submission:
  • Published as final Q&A: 05/02/2016

Branches of institutions that are established outside the Union

Does the notion of “branches of institutions that are established outside the Union” according to Article 1(1)(e) of Directive 2014/59/EU (BRRD) refer to Union branches of third-country institutions?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2578
  • Topic: Other topics
  • Date of submission:
  • Published as final Q&A: 21/01/2022

Reporting of outflows and Inflows arising from secured lending transaction where collateral is not Level 1, Level 2A and Level 2B asset on DA LCR templates C 73.00 and C 74.00

On which rows of the liquidity coverage templates C 73.00  - Outflows and C 74.00 - Inflows should firms report flows arising from secured lending transaction where collateral is not Level 1, Level 2A and Level 2B asset and therefore non-liquid asset. ANNEX XXV – REPORTING ON LIQUIDITY (PART 2 OUTFLOWS) and ANNEX XXV – REPORTING ON LIQUIDITY (PART 3: INFLOWS) state that ‘Credit institutions shall only report the Level 1, Level 2A and Level 2B assets that qualify as liquid assets in accordance with Title II of Commission Delegated Regulation (EU) 2015/61. Where collateral is Level 1, Level 2A or Level 2B but does not qualify as liquid asset in accordance with Title II of Commission Delegated Regulation (EU) 2015/61 it shall be reported as non-liquid.’Therefore are firms not required to report flows arising from secured lending transaction where collateral is non Level 1, Level 2A and Level 2B asset in section ID 1.2 of the C 73.00  and C 74.00 on the rows for collateral that does not qualify as a liquid asset? The specific remark regarding secured lending and capital market-driven transactions on ANNEX XXV – REPORTING ON LIQUIDITY (PART 3 INFLOWS) 1.2 (3) is ambiguous when viewed in conjunction with the decision tree guidance for reporting assets and liabilities from secured lending which states ‘Allocate into one relevant item of ID 1.2’.If firms are not required to report flows arising from secured lending transaction where collateral is non Level 1, Level 2A and Level 2B asset in section ID 1.2 of the C 73.00  and C 74.00 where should they be reported? We assume they must be reported somewhere as they contribute to the firms’ net liquidity outflow, but to report these flows in section 1.2 can distort the numerator calculation on row 090 of C 76.00.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2016_2576
  • Topic: Supervisory reporting - Liquidity (LCR, NSFR, AMM)
  • Date of submission:
  • Published as final Q&A: 04/08/2017

Assigning Specific Credit Risk Adjustments for a group of exposures to the exposures within the group

Following question 2013_499, could you confirm that this implies that the collective provisions allocated to specific portfolios for accounting purposes (FINREP) will agree at aggregate level with the amounts booked in the financial statements but the allocation for RWA to single exposures will differ from the allocation for accounting purposes to single exposures and thus a single exposure will show a different collective provision for accounting purposes (FINREP) than that for RWA?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 183/2014 - RTS for the calculation of specific and general credit risk adjustments
  • ID: 2016_2574
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 18/11/2016

Two validation rules on "Treasury shares" no more available considering the cancellation of another validation rule on the same matter

Why validation rules  v2060_s (for FINREP F01.03, rows 240,260, col 010) and v2061_s (for FINREP F17.03, rows 340,360, col 010), asking for negative value are still active while the n° v2028_s (for FINREP F46.00, rows 010,040,210, col 090,110), for same value as the 2 precedent controls, asking for negative value too, has been deleted in the version 2.3

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2016_2573
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 13/12/2019

Own funds requirements for non-continuous options which are perfectly matched

If a bank transacts in 2 back-to-back non-continuous options so that there is no residual market risk, is there a requirement that each transaction is separately capitalised as is implied by the Regulation. If netting is not allowed this will lead to a significant own funds requirement for what is in effect a zero market risk position, particularly given the treatment of short options positions where a maximum payout is not specified?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 528/2014 - RTS on non-delta risk of options in the standardised market risk approach
  • ID: 2016_2571
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 11/11/2016