According to Article 32 in Delegated Regulation (EU) 2015/61 an inflows from credit facility may be considered under LCR if its residual maturity is no longer than 30 calendar days. In the answer to question 2017_3266 EBA further explains that: With regard to debt to be repaid to the reporting credit institution in the context of credit facilities, only those facilities shall be considered where the expiry date falls within the next 30 calendar days and where there is no contractual option for prolongation. The reference to the option for prolongation in case of facilities expiring within the next 30 calendar dates is not fully clear, since it is not indicated who has this option: credit institution extending the facility or its client funding its needs with this facility.

In our view if it is the client who has the contractual option, there is an obligation for the credit institution to prolong the facility upon the client’s request. In this case the credit institution should not recognize the inflow in LCR, assuming that in stressed market conditions the client will exercise the option and prolong the facility. However if there is no such option for the client, i.e. assuming no additional actions the client is obliged to repay all funding within 30 calendar days and the credit institution has no obligation to prolong the facility even if the client requests so (potential prolongation is a discretional decision of the credit institution), the inflow can be recognized. 

We seek clarification with respect to the treatment of expected inflows from contracts where the expiry date falls within 30 calendar days and the credit institution has the contractual right, but not the obligation, to prolong the facility upon a potential client’s request.