Question ID
2015_1908
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Credit risk
Article
201
Paragraph
1
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
201
Type of submitter
Consultancy firm
Subject matter
Eligibility of religious communities or churches
Question

Are churches or religious communities eligible protection providers under all approaches and thus included in the list of providers of Article 201 with reference to paragraph 1(b)?

Background on the question

Article 115(3) of the CRR states that churches or religious communities should be treated as regional government or local authorities when applying the standard risk weight, specifically for "... churches or religious communities constituted in the form of a legal person under public law shall, in so far as they raise taxes in accordance with legislation conferring on them the right to do so …" but it doesn't assign to churches or religious communities any specific exposure class.

Submission date
Final publishing date
Final answer
Exposures to churches or religious communities may under certain conditions be treated as exposures to regional governments or local authorities according to Article 115 (3) of Regulation (EU) No 575/2013 (CRR). However, Article 201 (1) of CRR explicitly sets out a list of parties that are eligible providers of unfunded credit protection which includes regional governments and local authorities (Article 201 (1) (b) of CRR), but does not extend this eligibility to entities that may be treated on an equivalent basis with eligible protection providers for the purposes of calculating risk weighted exposure amounts. Therefore, churches or religious communities that may be risk weighted according Article 115 (3) of CRR may not be treated as eligible providers of unfunded credit protection according to Article 201 (1) (b) of 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.

Disclaimer

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