Question ID:
2021_6174
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Topic:
Credit risk
Article:
500
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Article/Paragraph:
500
Disclose name of institution / entity:
No
Type of submitter:
Individual
Subject Matter:
Cut-off date for the implementation of the adjustment for massive disposals
Question:

The last part of the first subparagraph of Article 500 states that "The adjustment referred to in the first subparagraph [(i.e. Adjustment for massive disposals)] may only be carried out until 28 June 2022 and its effects may last for as long as the corresponding exposures are included in the institution's own LGD estimates". 

How is 28 June 2022 to be interpreted? Is it a repetition of point (b) of subparagraph 1 (i.e. "the dates of the disposals of defaulted exposures are after 23 November 2016 but not later than 28 June 2022") or it represents the cut-off date by which the adjustment can be estimated?

Background on the question:

The question arises because it is not clear if the date indicated (i.e. 28 June 2022) identifies the last date in which a massive disposal can take place and be considerated in the adjustment or indicates the last date in which the adjustment can be computed.

Date of submission:
06/09/2021
Status:
Question under review
Answer prepared by:
Answer prepared by the EBA.
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