Question ID
2013_588
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Own funds
Article
481
Paragraph
1
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
-
Type of submitter
Credit institution
Subject matter
Application of specific national filters and deductions when computing threshold deductions
Question

When applying the transitional provisions calculation of Common Equity Tier 1, the threshold deductions exist: (a) associated with non-significant holdings in financial sector entities (FSE) which are covered by Articles 36(1)(h) and 46 of Regulation (EU) No 575/2013 (CRR); and, (b) the ones associated with the significant holdings in FSE and Deferred Tax Assets that arise from temporary differences that are covered in article 470 of CRR. Both take into account theoretical values for a “relevant Common Equity Tier 1” (or “aggregate amount of Common Equity Tier 1” in the wording of 46(1)(a) of CRR which serves as a base for the calculation of the threshold that determines the deductions arising from these assets. Assuming there are specific national deductions and filters subject to transitional provisions to be applied at the Common Equity Tier 1 level pursuant Article 481, how should these be incorporated when determining the “relevant CET1” for the thresholds calculations in both cases?

Background on the question

This issue influences the computation of the capital ratios according to transitional measures.

Submission date
Final publishing date
Final answer

Article 481(1) of Regulation (EU) No 575/2013 (CRR) provides for a general derogation from Articles 32 to 36 of the CRR (Prudential Filters and Deductions) from Common Equity Tier 1 (CET 1) capital until 31 December 2017.

The calculation of the "aggregate amount of Common Equity Tier 1" according to Article 46(1)(a) of the CRR and the "relevant Common Equity Tier 1 items"  according to Article 470(1) of the CRR both include a reference to Articles 32 to 35 and certain elements mentioned in Article 36. Therefore, where institutions are required to make additional adjustments to CET 1 items according to Article 481(1), these shall also be taken into account for the purposes of calculating the "aggregate amount of Common Equity Tier 1" according to Article 46(1)(a) of the CRR and the "relevant Common Equity Tier 1 items" according to Article 470(1) of the CRR.

Status
Final Q&A
Answer prepared by
Answer prepared by the EBA.
Note to Q&A

Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR) and continues to be relevant.

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