Question ID
2026_7901
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Operational risk
Article
CRR Article 314
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Regulation (EU) 2024/3117 - ITS on supervisory reporting of institutions
Article/Paragraph
Annex II – C 16.02
Name of institution / submitter
Brand New Day Bank N.V.
Country of incorporation / residence
The Netherlands
Type of submitter
Credit institution
Subject matter
Interpretation of validation rules v90316_m and v90317_m for “Average Value” column c0070 in template C 16.02
Question

Under Regulation (EU) 2024/3117 and template C 16.02 (“Business indicator and business indicator components”), column c0070 is labelled as “Average Value”.

The following validation rules apply:

v90316_m:
{r0310,c0070} = sum({r0320,(c0010,c0030,c0050)}) - sum({r0330,(c0010,c0030,c0050)}) / 3

v90317_m:
{r0340,c0070} = sum({r0350,(c0010,c0030,c0050)}) - sum({r0360,(c0010,c0030,c0050)}) / 3

Based on standard operator precedence, the “/3” appears to apply only to the IPS adjustment terms (r0330 and r0360), and not to the complete fee and commission income/expense calculations.

As a consequence, for institutions without IPS balances (r0330 = 0 and r0360 = 0), the validations effectively become:

{r0310,c0070} = sum({r0320,(c0010,c0030,c0050)})

and

{r0340,c0070} = sum({r0350,(c0010,c0030,c0050)})

This appears to imply that c0070 should contain a three-year cumulative sum instead of a three-year average.

Could the EBA clarify whether:

  1. the current validation behaviour is intentional; or
  2. the intended validation should instead be interpreted/calculated as:

(sum({r0320,(c0010,c0030,c0050)}) - sum({r0330,(c0010,c0030,c0050)})) / 3

and

(sum({r0350,(c0010,c0030,c0050)}) - sum({r0360,(c0010,c0030,c0050)})) / 3

Background on the question

Background on the question:
The question relates to the operational risk reporting framework introduced under Regulation (EU) 2024/3117 and applicable to template C 16.02.

Article 314 CRR refers to BI components being calculated as annual averages over the previous three financial years. In addition, the EBA Final Report on operational risk reporting refers repeatedly to “annual average over the last three financial years”.

However, the current wording of validation rules v90316_m and v90317_m appears to apply the “/3” only to the IPS adjustment terms due to operator precedence.

This seems inconsistent with:

  • the semantics of column c0070 (“Average Value”);
  • the CRR Article 314 methodology;
  • and the operational risk reporting framework objective of reporting three-year averages.

The question therefore seeks clarification on whether the current validation behaviour is intended or whether the validation formulas should instead apply the division by 3 to the complete calculation.

Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because the matter it refers to has already been identified and the validation rules have been deactivated.

Status
Rejected question