Question ID
2025_7519
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Liquidity risk
Article
421
Paragraph
5
Subparagraph
b
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Delegated Regulation (EU) 2015/61 - DR with regard to liquidity coverage requirement
Article/Paragraph
25(4)(b)
Type of submitter
Credit institution
Subject matter
Justification to consider a ‘significant penalty’ and to be excluded from the outflows
Question

Pursuant to article 25(4)(b) of Delegated Regulation (EU) 2015/61, does the cumulative loss of accrued interest, representing more than 50% of the total contractual interest income upon early withdrawal of term deposits (specifically those which have been active for more than 50% of their contractual term, have an original maturity longer than 30 days, and a residual maturity exceeding 30 days), constitute sufficient justification to consider this as a ‘significant penalty’ under article 25(4)paragraph (b), with the purpose of discouraging early withdrawal, and therefore allow such retail deposits (for which more  than 50% of contractual term has passed)  to be excluded from the outflows?

Background on the question

The Article 25(4)(b) of the Delegated Regulation (EU) 2015/61 stipulates that credit institutions may exclude from the calculation of outflows certain clearly circumscribed categories of retail deposits as long as in each and every instance the credit institution rigorously applies the following provisions for the whole category of those deposits, unless an exception can be justified on the basis of circumstances of hardship for the depositor:

(a) within 30 calendar days, the depositor is not allowed to withdraw the deposit; or

(b) for early withdrawals within 30 calendar days, the depositor has to pay a penalty that includes the loss of interest between the date of withdrawal and the contractual maturity date plus a material penalty that does not have to exceed the interest due for the time that elapsed between the date of deposit and the date of withdrawal.

Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because the matter has been already clarified in the various EBA monitoring reports on the LCR. Notably in the one of 2019 and 2025.

Status
Rejected question