Our question refers to EBA validationrule v1251_m which is, in our view, not always applicable. According to this rule F 05.01 [r010 c030] "Loans and advances from Credit institutions which are 'On demand [call] and short notice [current account]' must be equal to F 01.01 [r040 c010] 'Other demand deposits".
The data point ‘On demand [call] and short notice [current account]’ in Template F 05.01 [r010 c030] includes ‘Loans and advances - On demand [call] and short notice [current account]’ from the accounting portfolio ‘Cash and cash balances at central banks’ as well as ‘Loans and advances - On demand (call and short notice (current account)’ from all other accounting portfolios ‘(..) other than Held for trading’. In our group Cash collaterals (paid) from OTC derivatives due to credit institutions are balanced as ‘Loans and advances. On demand (call and short notice (current account)’ in the accounting portfolio 'Financial assets at amortised cost' [F 01.01 r183 c010]. It is in our view not appropriate to report these collaterals as ‘Other demand deposits’ in F 01.01 [r040 c010 because they are no “Cash equivalents” according IAS 1.54(i) and because they are only payable when the contract is closed out. Therefore v1251_m is not a blocking validation rule and F 05.01 [r010 c030] can not (always) be equal to F 01.01. [r040 c010].
Repeated query of supervisory authority (Deutsche Bundesbank) after submission of FINREP.
The cash collaterals from OTC derivatives due to credit institutions as described in the question are payable only when the contracts are closed out and not on demand. For this reason they are not reported in Annex V to Regulation (EU) No 680/2014 (ITS on Supervisory Reporting), template F01.01 “Other demand deposit” and they shall not fall under F 05.01 [r010 c030] either.
This information shall be reported in F 05.01 under “other term loans” which as per Annex V instructions shall include debit balances with contractually fixed maturities or terms that are not included in other items.
The validation rule is therefore correct.