- Question ID
-
2023_6812
- Legal act
- Regulation (EU) No 575/2013 (CRR)
- Topic
- Liquidity risk
- Article
-
411
- Paragraph
-
2
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement
- Article/Paragraph
-
3(8), 25(2)
- Type of submitter
-
Credit institution
- Subject matter
-
Impacts on Consolidated Group LCR Deposit Categorisation where a Third Country subsidiary utilises a different threshold
- Question
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As per Article 3 of the LCR Delegated Act, SME deposits are classified as Retail if their balance is <=€1m threshold. Additionally, Article 25 paragraph 2 defines a €500k threshold criteria for Other Retail Deposits. The national law within the UK has specified these thresholds as £880k and £440k respectively.
We would like to confirm if within the consolidated Group return, the outflow weighting should be applied based on the third country subsidiary regulatory definition or applied based on the LCR Delegated Act definition when converted into the Group’s reporting currency?
- Background on the question
-
Within the consolidated Group return, a deposit may be under the EUR threshold but greater than the GBP threshold. In the example described below, should the higher outflow associated with the GBP threshold, be used in the consolidated return?
Please see following example.
There is a retail deposit in the UK subsidiary with a balance of £440,001. The EUR/GBP exchange rate of the day is 0.89 and so the EUR equivalent is €494,383.
The UK return will report this deposit as Other Retail but should the consolidated return report it as Other Retail (higher outflow amount) or stable retail as it is under the €500,000 threshold in as defined in the LCR Delegated Act.
- Submission date
- Rejected publishing date
-
- Rationale for rejection
-
This question has been rejected because the issue it deals with is already explained or addressed in the regulatory framework. In particular, please see Article 25(2) of Delegated Regulation(EU) 2015/61.
For further information on the purpose of this tool and on how to submit questions, please see “Additional background and guidance for asking questions”
- Status
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Rejected question