In accordance with Article 429(4) of the CRR, the total exposure measure should include the exposure values of all assets of an institution. By way of derogation from that provision, Article 429a(1), point (e), of the CRR envisages that an institution that is not a public development credit institution may exclude from its total exposure measure exposures that arise from passing-through promotional loans to other credit institutions.

Within the general principle established in Article 429(4) of the CRR, the exemption set out in Article 429a(1), point (e), is to be interpreted narrowly.

In the case at hand, Institution A cannot benefit from the preferential treatment set out in Article 429a(1), point (e), of the CRR. Indeed, Institution A merely refinances loans granted by other institutions by issuing covered bonds under the same terms and conditions. Since Institution A does not pass-through promotional loans granted by a public development credit institution or by the other subjects described in Article 429a(3) of the CRR to other credit institutions, such a structure does not meet the conditions envisaged by Article 429a(1), point (e), of the CRR.

Disclaimer:

The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.