Search for Q&As

Enquirers can use various factors to search for a Q&A:

  • These include searching by the Q&A ID; legal reference, date submitted, technical standard / guideline, or by keyword if known.
  • Searches can be extended to more than one legal act, topic, technical standard or guidelines by making multiple selections (i.e. pressing 'Ctrl' on your keyboard, and selecting the relevant ones from the drop-down lists by left mouse-click).

Disclaimer:

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.

Final Q&As Q&As under review Rejected Q&As Archived Q&As All Q&As

List of Q&A's

Remuneration - Secondment contracts

This question regards the application of the remuneration policies of the so called "secondment contracts/assignment contracts" from a third country. In Directive 2013/36/EU (CRD) it is stated (as well as the FAQ) that "the rules also apply to i) subsidiaries established outside the EEA of institutions which have their head office in the EEA and ii) subsidiaries established inside the EEA of institutions which have their head office outside the EEA". If an executive member of a credit institution is "sent" on the terms of a secondment contract by a third country credit institution to a EU member credit institution (which however is not only a subsidiary), do the remuneration policies apply (if the staff member is paid by the third country institution and also on the basis of the contract with the third country institution).

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_577
  • Topic: Remuneration
  • Date of submission:

FINREP, NACE codes

FINREP table F 06.00 asks breakdown of loans and advances to non-financial corporations by NACE codes. Yet there is no NACE code K (Financial and insurance activities). It is obvious that most of the corporations falling under NACE code K are actually financial corporations with sector code S.12. However, there exist non-financial corporations with sector code S.11 with NACE code K. We ask for clarification if those loans should be reported here or not.

  • 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_559
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:

Derogation from the application of liquidity requirements on an individual basis

Does compliance with the obligations laid down in Part Six include the concept of “phasing-in” of the LCR from 60% in 2015 to 100% in 2018 as defined in Part Nine in Article 460(2) of Regulation (EU) No. 575/2013, or is compliance with 100% LCR from 2015 onwards required?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_503
  • Topic: Liquidity risk
  • Date of submission:

Calculating capital requirement for trading book positions - Derogation for small trading book business

According to article 94(1) of Regulation (EU) No 575/2013 (CRR), institutions which meet specific conditions are allowed to use an exception in calculating capital requirements considering trading book exposures. In letter (b) of abovementioned article it states that the size of institution's on- and off-balance sheet trading-book business should never exceed 6 % of total assets and EUR 20 million. It does not specify a time horizon for such an event. Should the institution calculate the trading-book business values starting from January 1st 2014 or from the day that it started their trading-book activity? For an example, if the institution’s trading-book business exceeded 6% of total assets only once on June 24 2013, could the derogation be applicable on January 2nd 2014? If not, for how long is the institution restricted from making use of the derogation specified in article 94(1)(b)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_500
  • Topic: Market risk
  • Date of submission:

Cash Inflows from major index equity instruments

Article 425(2)(f) of Regulation (EU) No 575/2013 (CRR) states "Monies due from positions in major index equity instruments provided there is no double counting with liquid assets". Which cash flows are included in this definition? Is it referred to monies due from expected dividends?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_481
  • Topic: Liquidity risk
  • Date of submission:

Cash outflows on other liabilities

What are the general mandatory requirements for clearing, custody and cash management deposits for the beneficial run-off factors of 5%(with deposit insurance scheme) and 25%(without deposit insurance) respectively? How can it be proved that a client is compromised in its operational functioning upon withdrawal of funds within the 30 day horizon? Can you give us an example?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_480
  • Topic: Liquidity risk
  • Date of submission:

Stand By Credit Facilities as Liquid Assets

In Article 416(1) of Regulation (EU) No. 575/2013 states: “Institutions shall report the following as liquid assets unless excluded by paragraph 2 and only if the liquid assets fulfil the conditions in paragraph 3: … e) standby credit facilities granted by central banks within the scope of monetary policy to the extent that these facilities are not collateralised by liquid assets and excluding emergency liquidity assistance;” Which real world examples exist for standby credit facilities, which are not collateralized by liquid assets, but at the same time fulfil the prerequisite of paragraph 3? Would the unused amount for potential ECB tender transactions which are not collateralised by liquid assets, as defined in the CRR, qualify for a standby credit facility?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_476
  • Topic: Liquidity risk
  • Date of submission:

Conditions taken into account to use the factor 0,7619

Should an institution stop using the factor 0.7619 as soon as the amount owed to the SME enterprise exceeds 1.5m EUR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_414
  • Topic: Credit risk
  • Date of submission:

Eligibility of CET 1 in case of an agreement for transfer of profit and coverage of losses

As a requirement for Common Equity Tier 1 (CET1) instruments with regard to distributions, the conditions governing the instruments may not include any obligation for the institution to make distributions to their holders and the institution is not otherwise subject to such an obligation (Article 28 (1)( h) (v) of Regulation (EU) No 575/2013 (CRR)). Is a contract with the 100% mother company of an institution according to which distributable profits of the subsidiary need to be fully distributed to the mother company at the end of each year and losses of the subsidiary are to be compensated in full by the mother company to be regarded as an obligation hindering eligibility of the instrument as CET1?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_408
  • Topic: Own funds
  • Date of submission:

Large Exposures - clients to CCPs

May a client relying on Article 305(2) to calculate own funds requirements for its trade exposures for CCP-related transactions with its clearing member in accordance with Article 306, rely on the exemption in Article 400 as regards such CCP-related transactions? Legal Reference: Article 295(1), 400, 305 and 306

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_365
  • Topic: Large exposures
  • Date of submission:

Outflows on other liabilities for Operational Accounts (Basel para 93 -104)

a. CRR in addition to clearing, custody and cash management CRR considers “other comparable services” eligible for a 5% run off. Are correspondent banking and prime brokerage services included in the definition? b. How does one prove that the client is unable to withdraw without compromising client’s operational functioning over a 30 day horizon? c. How often do you need to check if an account is meeting the criteria for operational accounts?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_305
  • Topic: Liquidity risk
  • Date of submission:

Treatment of cash collateral

What is the treatment in LCR and NSFR of cash collateral given or received in derivative transactions?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_302
  • Topic: Liquidity risk
  • Date of submission:

Repurchase and cancellation of Tier 2 in the open market less than 5 years from issue

Can you please confirm if Article 78(4) is meant to apply only to the redemption of T2 securities within 5 years of issuance (as specified in the terms and conditions of the instrument), or if it also prohibits the use of liability management exercises to repurchase (and cancellation) T2 notes at market levels within 5 years of the issuance.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_290
  • Topic: Own funds
  • Date of submission:

Value adjustments for prudent valuation (Additional Value Adjustments)

Article 34 of Regulation (EU) No. 575/2013 (CRR) requires institutions to apply a deduction from CET1 the amount of any additional value adjustments on all assets measured at fair value calculated in accordance with Article 105. Article 105(14) of the CRR specifies that the EBA shall submit draft regulatory technical standards to the Commission by 28 July 2013 (as per CRR corrigendum published on 2 August 2013). In this regard the EBA published a draft consultation paper (EBA/CP/2013/28) whereby it is specified that "as a consequence of the EBA decision to conduct a QIS, the EBA currently envisages to finalise the technical standard in Q2 2014". Therefore it is not clear as concerns the first reporting date on Q12014 whether institutions must: 1) not apply the prudential filter (i.e. the relative reporting item shall be valued zero) until the publication of the final EBA RTS 2) calculate the prudential filter in accordance with the Basel II framework (i.e. requirements for prudent valuation defined by each local regulator) 3) calculate the prudential filter in accordance with the draft EBA standards as defined in consultation paper EBA/CP/2013/28

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_273
  • Topic: Market risk
  • Date of submission:

Calculation of capital requirements for SME under Article 501 of CRR

How should the capital requirements be calculated for SME exposures according to Article 501 of Regulation (EU) No 575/2013 (CRR)? In essence we are asking if the risk weighted assets for qualifying SMEs should be reduced or only the capital requirements for qualifying SMEs.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_257
  • Topic: Credit risk
  • Date of submission:

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:

Additional value adjustments

According to the Article 34 of Regulation (EU) No 575/2013 (CRR), institutions shall apply the requirements of Article 105 to all their assets measured at fair value when calculating the amount of their own funds and shall deduct from Common Equity Tier 1 capital the amount of any additional value adjustments necessary. Does the provision “to all their assets measured at fair value” mean that this Article concerns all trading book positions or this Article concerns all trading and banking book positions?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_213
  • Topic: Market risk
  • Date of submission:

Reporting of the 10 largest exposures to institutions and the 10 largest exposures to unregulated financial institutions

The issue is that the term and definitions for "institution" and "unregulated financial entity" are not complementary and thus could cover the same counterparts. Could EBA confirm that they don't want to have the same entities reported in the 2 groups ("institutions" and "unregulated financial entities") and clarify both terms?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_211
  • Topic: Large exposures
  • Date of submission:

Firm shorts covered by client longs

We assume that an outflow should be reflected under Article 423 (4) of Regulation (EU) No 575/2013 (CRR) for any firm short currently covered using a client long position, unless the residual term of the borrowing of the client stock used to cover the short is contractually committed beyond 30 days.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_185
  • Topic: Liquidity risk
  • Date of submission:

Netting within cash pooling agreement used as part of cash management products

Where customers have both assets and liability balances within a cash pooling agreement (supported by a credit netting agreement) can the balance within the cash pooling agreement be treated as either a single net asset (Article 425) or a net liability (Article 420) i.e. not treated gross?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_170
  • Topic: Liquidity risk
  • Date of submission: