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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.

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List of Q&A's

Maturity matching

Articles 45, 59 and 69 of Regulation (EU) No 575/2013 (CRR) each include a condition that “the maturity of the short position matches the maturity of the long position or has a residual maturity of at least one year”, in order for the short position to be recognized for the calculation of the net long position. Please confirm that maturities are deemed to match for the purposes of these provisions where the maturity of the long and the short positions occur within the same calendar quarter.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_253
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 12/06/2015

Maturity matching

Articles 45(a), 59(a), 69(a) of Regulation (EU) No 575/2013 (CRR) each include a condition that “the maturity of the short position matches the maturity of the long position or has a residual maturity of at least one year”, in order for the short position to be recognized for the calculation of the net long position. Please confirm that maturities are deemed to match for the purposes of these provisions where the maturity of the short position is greater than the maturity of the long position. Where the maturity of the short is greater than the maturity of the long the institution will only ever be left with a net short position (economically a forward starting short), all things being equal, and should not therefore have to take a deduction.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_252
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 10/10/2014

Meaning of Article 79 (b) of Directive 2013/36/EU (CRD)

What should standardised banks do in order to live up to CRD Article 79 (b)? Should standardised banks make their own assessment of the risk weights assigned to unrated counterparts? I.e. If a banking counterpart (institution) in a 0 % risk weight country is unrated and therefore assigned a risk weight of 20 % according to Article 121of Regulation (EU) No 575/2013 (CRR), but an internal assessment shows that other comparable counterparts with a rating get assigned a 50 % risk weight according to Article 120 of CRR, what should the calculating institution do? Should the calculating institution overwrite the 20% with 50 % or should the calculating institution add the difference in risk weighted assets under Pillar II?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_249
  • Topic: Supervisory review and evaluation (SREP) and Pillar 2
  • Date of submission:
  • Published as final Q&A: 20/12/2013

Inclusion of incurred (IFRS) CVA in the IRB Provision shortfall calculation

Can the incurred CVA charge related to IRB exposures be treated as an eligible provision for the purposes of calculating the own funds reduction for IRB provision shortfall (per Article 159 of Regulation (EU) No 575/2013 (CRR))?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_245
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 20/12/2013

COREP templates to be submitted on a semi-annual basis.

The draft ITS (Articles 5(b), 6(b), 8(1)(b), 8(2)(b) and 12) and the CRR mention that OPR details, CR SEC details, Group Solvency and Losses on Immovable Properties templates are to be submitted on a semi annual basis. Can you confirm that the first reporting date for these templates will be 30 June 2014?

  • 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: 2013_244
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as final Q&A: 14/02/2014

How shall an institute explain a rating decision?

Article 431, paragraph 4 says that "institutions shall, if requested, explain their rating decisions to SMEs and other corporate applicants for loans, providing an explanation in writing when asked." Shall this be interpreted as institutions shall show the exact probability of default for the applicants or the applicants rating on the institutions internal rating scales or in any other way?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_240
  • Topic: Transparency and Pillar 3
  • Date of submission:
  • Published as final Q&A: 06/12/2013

Off-balance sheet items and definition of default

Please confirm that indeed the off-balance sheet part of a facility (e.g. undrawn amount) or any other off-balance sheet items e.g. acceptances, guarantees, etc should not be categorised in the "in default" exposure class even if the customer is classified as "in default".

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_239
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/12/2013

Tap issues

Article 484 and 486 of Regulation (EU) No. 575/2013 (CRR) provide for the grandfathering treatment of Tier 2 instruments that do not meet the criteria of Articles 62 and 63. Article 63 provides that callable Tier 2 should have a first call date not before five years after the date of issuance or raising (except Article 78(4)). When an institution has issued before 31/12/2011 a callable (non step) Lower Tier 2 bond with a first call date at year 5 and then has made a tap on that issue (i.e. increased the amount of the original issue a year later, for example), what is the grandfathering treatment of the amounts raised through the tap? Is it the same as the original bond (i.e. fully eligible) or should the tap be considered non fully eligible Tier 2 because, as of the tap date, the first call was before year 5, in which case the tap should be included in the amortized stock according to Article 86.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_238
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 24/01/2014

FINREP F13.1 row 010 Loans and advances col. 050 Financial guarantees received

What is the information that should be included in this box? Is it the whole amount of financial guarantees received, or is it the value of those financial guarantees received that are related to loans and advances collateralized by immovable properties or any other in rem guarantee? In other words, if a loan has only financial guarantees, and none of those included in columns 010 - 040, shall that financial guarantee be included in row 010 & column 050?

  • 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: 2013_236
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 14/02/2014

FINREP - Contents of templates 7 and 5 - Row "On demand [call] and short notice [current account]"

We wonder about the reporting of overnight accounts and advances and on the scope of templates 5 and 7: - overnight accounts and advances with counterparties "central banks and credit institutions" are not reported on a "loans and advances" row in table 1.1 but on the rows 030 et 040 ; nevertheless, do they have to be reported in tables 5 and 7 which concern "loans and advances" ? If yes, do they have to be reported on the row "On demand [call] and short notice [current account]"? - does overnight accounts and advances with other counterparties have to be reported on the row "On demand [call] and short notice [current account]" in tables 5 and 7 ?

  • 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: 2013_235
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 14/02/2014

Definition of term "member state"

Within Regulation (EU) No 575/2013 (CRR) there are several Articles using the term "member state" (e.g. Article 4 Paragraph 1 Subparagraph 28, 29, 30, 31, 32, 33, 40, 43, 44, 127 - Article 6 Paragraph 2 - Article 7 Paragraph 1 - ...). Unfortunately neither CRR nor Directive 2013/36/EU (CRD) contain a definition of the term "member state". Can you therefore please provide a definition of the term "member state" especially stressing whether this refers to the states of the European Union or to the states of the European Economic Area?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_233
  • Topic: Other issues
  • Date of submission:
  • Published as final Q&A: 26/09/2014

Annex XV Validation formulae, "≡" vs "="

We would like to know what the differences are, for the validation formulae purpose, between the symbols "≡" and "=". E.g: Validation {F 20.04 , r140 , c030}≡{F 20.07 , r190 , c020} (without ID). Does this validation mean that the value of both "boxes" o "line items" is the same or, on the contrary, that the "concept" they both refer to is the same? We though it was the first option until we bumped into this question. If it were the second alternative, should it appear in the majority of validation links?

  • 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: 2013_231
  • Topic: Supervisory reporting - Other
  • Date of submission:
  • Published as final Q&A: 14/02/2014

Deviations between the definition of SA exposure value for securitisation exposures and for other exposure classes

The exposure value for all other exposure classes corresponds to the accounting value after SCRA, Prudent Valuation and other own funds reductions that relate to the asset item (Article 111(1) Regulation (EU) No 575/2013). The exposure value for securitisation exposures corresponds to the accounting value after SCRA based on article 110 CRR, without taking into account Prudent Valuation or other own funds reductions related to the asset item. Is this deviation intended?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_230
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 28/11/2014

Requirement to establish a risk/audit committee

Article 76(3), first paragraph, requires significant institutions to establish a risk committee. According to the fourth subparagraph, "competent authorities may allow an institution which is not considered significant as referred to in the first subparagraph to combine the risk committee with the audit committee as referred to in Article 41 of Directive 2006/43/EC." Does this mean that all institutions in the EU are required to establish at least a joint risk and audit committee?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_228
  • Topic: Internal governance
  • Date of submission:

Validation Rules (SEC) - Rule v531_m does not take into account value adjustments on deductions from own funds

Validation rule v531_m does not seem to take into account that as stated in CRR 266(1) deductions from own funds can be reduced by the specific credit risk adjustments made in respect of the exposure leading to the deduction. Column 180 of C 13.00 (CR SEC IRB) reports these deductions as specified in CRR 266(3). Crr 266(3a) in turn refers to CRR 266(1) and (2) for the calculation of the deduction amounts. When there are such specific credit risk adjustments on deductions from own funds, the value in column 180 is reduced accordingly and the sum of columns 170 and columns 180 does not add up to the value of column 190. Should therefore this validation rule not be weakend to {c190} <= {c170} + {c180} ?

  • 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: 2013_227
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as final Q&A: 07/03/2014

Deferred tax assets that rely on future profitability and that arise from temporary differences

According to art. 469(1c) CRR, the deferred tax assets that arise from temporary differences can be deducted in a transitional manner using the percentages specified in art. 478(2) CRR. The residual amount that is not deducted, is to be risk weighted at 0% (art. 472(5) CRR). Whereas for other regulatory deductions there is a specific row in template C 05.01 that is used to indicate the transitional amounts, it is not clear where in this template the transitional amounts for deferred tax assets that arise from temporary differences must be indicated. For row 380 is it specifically indicated that it holds the transitional arrangement referred to in art. 470 CRR, while rows 390-420 hold the transitional arrangements related to own funds instruments of financial sector entities where the institution has a significant investments. Row 170 only concerns deferred tax assets that rely on future profitability and do not arise from temporary differences.

  • 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: 2013_225
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as final Q&A: 14/10/2016

Article 416 - Reporting on liquid assets

Can assets issued by credit institutions, investment firms, insurance undertakings, etc. (reference to Article 416(2)) qualify for reporting as liquid assets if these are guaranteed by one of the parties mentioned in article 416(1)(c)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_222
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 20/12/2013

Exemptions from deduction for CET1 items

In Article 48(1)(b) of Regulation (EU) No 575/2013 (CRR) it states: 'where an institution has a significant investment in a financial sector entity, the direct, indirect and synthetic holdings of that institution of the CET1 instruments of those entities that in aggregate are equal to or less than 10% of the CET1 items of the instritution calculated after applying the following:' Question: When making the comparison between the amount of investment and CET1 of the reporting institution, does that comparison refer to the aggregate amount of all significant investments in all financial sector entities OR the comparison should be made on an individual entity basis?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_221
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 26/09/2014

Grandfathering of Own Funds Instruments

When an institution has launched an exchange offer, prior to December 31st 2011, that will exchange, on a one for one basis, existing Tier 1 bonds, with or without an incentive to redeem, with bonds that have similar provisions, the same coupons and call dates, but a different issuer (within the same banking group), will the newly issued bonds be considered in the same category as the former bonds (with or without an incentive to redeem)? This seems consistent with the fact that the newly issued bonds obviously do not have a coupon that is priced at fair market value on the issuance date, so assessing whether they have an incentive to redeem the day they are issued does not really make sense, but a clarification would be helpful.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_220
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 06/06/2014