Question ID
2024_7221
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Supervisory review and evaluation (SREP) and Pillar 2
Article
47a
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
N/A
Type of submitter
Credit institution
Subject matter
Consistency of treatment between the technical guarantees that are subject to the Pillar 2 requirement (Supervisory Expectation of the ECB) and the technical guarantees that are subject to the Pillar 1 requirement (Regulation EU 2019/630).
Question

Should the exemption of technical guarantees from the backstop calculation subject to the Pillar 2 requirement) be extended to the technical guarantees subject to the Pillar 1 requirement?

Background on the question

The current backstop regulation specifies a backstop exemption only for technical guarantees originated before April 26th 2019, i.e. exposures that are not subject to the Regulation (EU) 2019/630 as regards minimum loss coverage for non-performing exposures.

 

Indeed, the ECB’s STE reporting instructions published in 2021 explicitly state that non-performing technical guarantees granted before April 26th 2019 are exempted from the calculation of the Pillar 2 backstop: 

« Exemptions are also applicable to the “technical guarantees”, defined as those that guarantee the ability of the bank’s client to comply with contractual non-economic obligations (such as the supply of goods or execution of works) towards a third party ».

This treatment has been confirmed each year in ECB’s STE reporting instructions published since 2021.

However, Article 47a CRR (introduced by Regulation EU 2019/630) does not provide any specific treatment for non-performing technical guarantees granted from April 26th 2019. CRR has not been updated to take this specific treatment for technical guarantees into account. 

Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because it is out of scope of the Q&A process /tool and does not relate to the legislative acts referred to in Article 1(2) of the EBA Regulation and their associated delegated and implementing acts, guidelines and recommendations. In particular, this question refers to the ECB Short Term Exercise (STE)- reporting.

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. 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
Rejected question