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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

General Prior Permission (GPP) to call, redeem, repay or repurchase eligible liabilities pursuant to Article 78a(1) second subparagraph of the CRR .

Can the resolution authority allow - under specific conditions - institutions, to which a GPP has been granted, to consider the issuance of new eligible liabilities instruments during the authorization period for the purpose of calculating the unused part of the predetermined amount?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 241/2014 - RTS for Own Funds requirements for institutions
  • ID: 2022_6597
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 28/03/2023

Scope of temporary treatment of unrealised gains and losses measured at fair value through other comprehensive income in view of the COVID-19 pandemic

Do exposures to “central governments, regional governments, local authorities and public sector entities” referred to in article 468 (1) of the CRR should be identified before or after applying credit risk mitigation techniques?Do exposures to “central governments, regional governments, local authorities and public sector entities” referred to in article 468 (1) of the CRR should be identified before or after applying credit risk mitigation techniques?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6590
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/01/2023

Prudential filters to the fair value reserves associated to Cash Flow Hedge

Does the prudential filter established in CRR Article 33(1) apply only to unrealised capital gains and losses?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6580
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 14/04/2023

Netting of FSE holdings

Scope of EBA Q&A 2019_4517 with respect to trading book positions.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6488
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/01/2023

Netting of Financial Sector Entity (FSE) holdings

Is there a requirement to establish an additional credit risk exposure in case FSE deduction amounts are reduced by netting with eligible short FSE positions?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6487
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/01/2023

Netting of Financial Sector Entity (FSE) holdings

Is there a requirement to establish an additional credit risk exposure in case Financial Sector Entity (FSE) deduction amounts are reduced by netting with eligible short FSE positions?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6486
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/07/2022

Capital increase without the issuance of new shares

Is a capital increase without the issuance of new shares in scope of article 26(3)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6484
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/01/2023

Early redemption options

Would an early redemption option exercisable by the holder of the instrument cause such instrument to be ineligible altogether or would it merely result in its maturity being deemed shortened in accordance with Article 72c(2)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6456
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/07/2022

Calculation of goodwill included in the valuation of significant investments in insurance undertakings

A. For the purposes of a deduction under Article 36(1)(b) CRR as per Article 37(b), should the goodwill (Article 4(1) no. 113 and 115 CRR) included in the valuation of significant investments calculated excluding goodwill booked under an insurance subsidiary given that this goodwill is not included in the valuation of a significant investment of the bank (i.e. goodwill not included in the prudential consolidation as per Articles 1, 11, 18 and 24 of CRR and EBA RTS on the methods of prudential consolidation)?  B. Can you confirm that the goodwill booked under an insurance subsidiary (which is excluded from the valuation of significant investments as per prudential consolidation) should be treated as part of the equity exposure of the bank to the insurance subsidiary and this be risk weighted as per Article 49(1) and Articles 133 or 155 (depending on Standardized or Advanced IRB method)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6431
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/07/2022

Calculation of goodwill included in the valuation of significant investments in insurance undertakings

A. For the purposes of a deduction under Article 36(1)(b) CRR as per Article 37(b), should the goodwill (Article 4(1) no. 113 and 115 CRR) included in the valuation of significant investments calculated excluding goodwill booked under an insurance subsidiary given that this goodwill is not included in the valuation of a significant investment of the bank (i.e. goodwill not included in the prudential consolidation as per Articles 1, 11, 18 and 24 of CRR and EBA RTS on the methods of prudential consolidation)?  B. Can you confirm that the goodwill booked under an insurance subsidiary (which is excluded from the valuation of significant investments as per prudential consolidation) should be treated as part of the equity exposure of the bank to the insurance subsidiary and this be risk weighted as per Article 49(1) and Articles 133 or 155 (depending on Standardized or Advanced IRB method)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6419
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/07/2022

Calculation of the amount of holdings of own Common Equity Tier 1 instruments on the basis of the net long position

How should the condition in  Article 42 a) i)  “(i) the long and short positions are in the same underlying exposure and the short positions involve no counterparty risk”  be applied when there are long and short positions on the same underlying reference with the same counterparty under the same master netting agreement ?   Are the single net amounts fixed by such contracts to be considered rather than the gross amounts?  Explanatory note: The master netting agreement we are considering complies with the conditions required under CRR (Article 206)    

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6410
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/01/2023

Calculation of the amount of holdings of own Common Equity Tier 1 instruments on the basis of the net long position

Could it be assumed that short positions maintained with a Qualifying Central Counterparty do not involve counterparty risk according to Article 42 a) i) CRR and thus be netted for the purposes of the calculation of the amount of holdings of own Common Equity Tier I instruments to be deducted under point (f) of Article 36(1)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6409
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/01/2023

Calculation of goodwill included in the valuation of significant investments in insurance undertakings

A. For the purposes of a deduction under Article 36(1)(b) CRR as per Article 37(b), should the goodwill (Article 4(1) no. 113 and 115 CRR) included in the valuation of significant investments calculated excluding goodwill booked under an insurance subsidiary given that this goodwill is not included in the valuation of a significant investment of the bank (i.e. goodwill not included in the prudential consolidation as per Articles 1, 11, 18 and 24 of CRR and EBA RTS on the methods of prudential consolidation)?  B. Can you confirm that the goodwill booked under an insurance subsidiary (which is excluded from the valuation of significant investments as per prudential consolidation) should be treated as part of the equity exposure of the bank to the insurance subsidiary and this be risk weighted as per Article 49(1) and Articles 133 or 155 (depending on Standardized or Advanced IRB method)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6408
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 26/07/2022

Scope of CRR definition of Financial Institution

Are deposits maintained by entities meeting the literal requirements of Article 4(1)(26) CRR excluded from the coverage of the Deposit Guarantee Schemes (DGS)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6405
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 20/06/2022

Deduction of indirect holdings of own funds instruments in insurance and reinsurance undertakings which are subsidiaries of insurance holding company from own funds

Should indirect holdings of own funds instruments in insurance and reinsurance undertakings which are subsidiaries of insurance holding company be subject to the exemption provided for in Article 15a(2)(a) of Commission delegated regulation No 241/2014?   

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 241/2014 - RTS for Own Funds requirements for institutions
  • ID: 2022_6398
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 31/03/2023

Treatment of "not designated elements" for the purpose of computing prudential capital requirements

Our entity will apply IFRS 9 provisions regarding hedge accounting to financial reporting starting from January 2022. IFRS 9 §6.5.15 and §6.5.16 introduce a new type of other comprehensive income: when using hedge accounting, an entity may separate some elements considered as a “cost of hedging”, and recognise them in other comprehensive income as “not designated elements”.  Commission Implementing Regulation 2021/451, in its template-related instructions (1.3 Equity §27), mentions that such elements shall be reported in a dedicated line “Hedging instruments [not designated elements]” for the purpose of FINREP. Specifically, this line is distinct from “Hedging derivatives. Cash flow hedges reserve [effective portion]”. However, cash flow hedge reserve and not designated elements are very similar elements: as an evidence, our entity will transfer amounts currently in cash flow hedge reserve to the new category “not designated elements”. We are therefore wondering the regulatory treatment  of “not designated elements” for the purpose of computing prudential capital requirements.  Cash flow hedges reserve shall not be included in any element of own funds (REGULATION (EU) No 575/2013 §33) Should “not designated elements” treatment be aligned on that of the cash flow hedge reserve ? or should “not designated elements” be included in prudential own funds ?  

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6380
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 23/09/2022

Goodwill included in the valuation of significant investments

1. For the purposes of Article 37(b) CRR, are the significant investments of the institution limited to the significant investments in financial sector entities (FSE) or should they include all significant investments (i.e. also significant investments in entities that are not financial sector entities)? 2. Should Article 37(b) CRR be applied only when the significant investments outside the prudential perimeter are valued for prudential purposes using the equity method or should it be applied also when the significant investments are valued for prudential purposes at historical cost?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6374
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 31/03/2023

Calculation of the CET1 deduction for non-performing exposures (NPEs)

Which date shall be used to determine the applicable factor that is used to calculate the amount determined in Article 47c(1)(a) CRR when the terms and conditions of a non-performing exposure, which was originated prior to 26 April 2019, have been modified by the institution in a way that increased the institution's exposure to the obligor and  the counterparty defaulted before the initial origination of the exposure? The date on which the counterparty initially defaulted or the date on which the exposure was initially originated or the date on which the terms and conditions of the NPE have been modified by the institution in a way that increased the institution's exposure to the obligor?     Additionally, which date is supposed to be considered if the default of the exposure/counterparty occurs after the initial date of origination of the exposure and before an increase in amount of exposure? The date of default or the modification date?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2022_6351
  • Topic: Own funds
  • Date of submission:

Effective absence of set-off or netting arrangements

If a statutory set-off or netting right exists and cannot be contractually excluded, would an AT1, T2 or eligible liabilities instrument be automatically considered ineligible pursuant to, respectively, Article 52(1)(r), Article 63(p) or Article 72b(2)(f) of Regulation (EU) No. 575/2013 (CRR) or would the instrument be eligible as long as the conditions for such statutory set-off or netting are not fulfilled, in particular in cases where a counterclaim to be used for set-off or netting does not exist? If a statutory set-off or netting right exists, can be contractually excluded, but has not been excluded, would the instrument be automatically considered ineligible or would the instrument be eligible as long as the conditions for such statutory set-off or netting are not fulfilled, in particular in cases where a counterclaim to be used for set-off or netting does not exist?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2021_6285
  • Topic: Own funds
  • Date of submission:
  • Published as Rejected Q&A: 29/04/2022