Question ID
2019_4486
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Credit risk
Article
Annex I
Paragraph
(2)(b)(ii) and (3(b)(i)
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
na
Name of institution / submitter
ECB DGMS4/SPO/RA
Country of incorporation / residence
EU
Type of submitter
Competent authority
Subject matter
Original maturity of credit lines until-further notice
Question

For risk classification as off-balance sheet item according to Annex I CRR, is the original maturity longer than one year where non-retail credit lines until further notice (i.e. no fixed maturity) may be cancelled with 3 months advance notification period and even immediately in case the borrower becoming delinquent or declaring bankruptcy?

Background on the question

Unless meeting the conditions for low risk, the risk category of undrawn credit facilities depends on whether the original maturity is longer than one year, cf. paragraphs (2)(b)(ii) and (3)(b)(i) of Annex I CRR. There is no fixed original maturity where an institution provides a credit line until further notice (i.e. available as long as not having been cancelled). The credit line could be available for less than one year under a scenario where the institution exercises a right to cancel the credit line with effect before one year after origination of this credit line. In the specific case in question, the institution has the right to cancel the credit facility with an advance notice of three months, but the facility can be cancelled immediately in case of the borrower becoming delinquent or declaring bankruptcy,

Submission date
Rejected publishing date
Rationale for rejection

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Status
Rejected question