Question ID
2024_6970
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Credit risk
Article
114
Paragraph
2
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
Not applicable
Type of submitter
Credit institution
Subject matter
Sovereign credit assessment to apply to exposure of central government, central bank and government-100%-owned central bank.
Question

1. Is sovereign credit assessment of a country by a nominated ECAI available for assigning a corresponding risk weight to exposures to the central government or central bank of this country?

2. Is sovereign or central government credit assessment applicable to central bank when a central bank is 100% owned by central government?

Background on the question

Article 114 CRR states that exposures to central governments and central banks shall be assigned a 100% risk weight, unless the treatments set out in paragraphs 2 to 7 apply. And article 114 (2) CRR states exposures to central governments and central banks for which a credit assessment by a nominated ECAI is available shall be assigned a risk weight in accordance with Table 1 which corresponds to the credit assessment of the ECAI in accordance with Article 136.

Q&A 2017_3231 has answered that a nominated ECAI has provided a credit assessment that applies to exposures to the central government of a third country but not to exposures to the central bank of this country, this credit assessment is not available for assigning a corresponding risk weight to exposures to the central bank, vice versa. 

While the final answer of Q&A 2017_3231 is not covered the availability of sovereign credit assessment to central government or central bank and the situation of credit assessment that applies to exposure to the central government who fully own the central bank of its country.

Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because it is considered that EBA guidance or clarification is not needed with regard to the issue that it raises. For example, this can be the case where it is considered that the existing regulatory framework is sufficiently clear and unambiguous, or where different practices may be possible but it is not currently necessary to harmonise these further through the Q&A process.

The Single Rule Book Q&A tool has been established to provide explanations and non-binding interpretations on questions relating to the practical application or implementation of the provisions of legislative acts referred to in Article 1(2) of the EBA’s founding Regulation, as well as associated delegated and implementing acts, and guidelines and recommendations, adopted under these legislative acts.

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Status
Rejected question