Question ID
2015_1940
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Supervisory reporting - FINREP (incl. FB&NPE)
Article
99
Paragraph
2
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
Article/Paragraph
Annex III, IV, V
Type of submitter
Competent authority
Subject matter
FINREP – reporting of negative interest
Question

How to report the remuneration of assets with a negative interest rate?

Background on the question

The remuneration of some categories of assets has turned negative recently, be it some deposits at the ECB or other central banks, or government securities that were issued with a negative yield. In addition, in the low interest rate environment, the other components of the effective interest rate (fees, etc…) can turn the EIR into a negative rate to be used for the recognition of interest in the financial statements (and in FINREP), even when the contractual interest rate is positive.

Submission date
Final publishing date
Final answer

Negative remuneration on financial assets (remuneration proceeding from a negative effective interest rate) should be reported as an interest expense in FINREP under Regulation (EU) No 680/2014 13 ITS on Supervisory Reporting of institutions (ITS). Conversely, positive remuneration on financial liabilities should be reported as interest income.

Negative interests on financial assets should be reported in the current FINREP framework in the following way:

-       FINREP F 02.00 {r090, c010}

-       FINREP F 02.00 {r140, c010} ((Other liabilities))

-       FINREP F 16.01 {r270, c020}

-       FINREP F 16.01 {r260, c020} (Other liabilities)

-        

Positive interests on financial liabilities should be reported in:

-       FINREP F 02.00 {r010, c010}

-       FINREP F 02.00 {r080, c010} (Other assets)

-       FINREP F 16.01 {r270, c010}

-       FINREP F 16.01 {r150, c010} (Other assets)

-        

Negative remuneration on assets shall be reported together with interest expense from other liabilities (as above) and positive remuneration on liabilities shall be reported together with interest income on other assets (as above).

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

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