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Q&As refer to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.

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List of Q&A's

Reporting "type of connection" in column 040 of LE3 (C 29.00)

What type of connection should an institution report for Client A if "Client A" in a group of connected clients controls "Client B" (cotrol relationship - "a") and is additional economically connected with "Client C" (interconnectedness - "b")?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2013_683
  • Topic: Supervisory reporting - Large Exposures
  • Date of submission:
  • Published as final Q&A: 27/02/2015

Statement of profit or loss

Can you please clarify what is required by the Annex V guidance on this data point? Two parts of paragraph 24 (the reference given in the template) appear to be inconsistent. The phrase "May be reported" suggests that there is an option about whether or not to classify derivates Held For Trading in this data point, whereas "shall be included" suggests that the income and expense must be shown within interest income and expense, and therefore must be included in this data point 020 or data point 100 for any expense. Further, can you clarify how this paragraph 24 of Annex V relates to paragraph 21? Paragraph 24 is not given as a reference for this data point, but appears to be applicable as it applies to financial instruments Held For Trading. It strongly suggests that it is optional whether to include gains or losses from such instruments within Interest Income/ Expense or Gains and Losses. -------------

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Draft ITS on Supervisory Reporting of Institutions
  • ID: 2014_1000
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 27/02/2015

Aggregate Liabilities

Where wholesale funding issuance is undertaken in a currency which is different to the base reporting currency of the institution, and on issuance is swapped back for the duration of the liability (therefore leaving the institution with no currency risk on the transaction), does this issuance count towards the aggregate liabilities cap for single currency reporting?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1579
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 20/02/2015

Where and how much to report forward starting repo or reverse repo ?

Should article 422.2 and 425.2(d) in CRR be applicable on the initial disbursement flow of forward starting repo or reverse repo for purpose of LCR ? Where to report initial disbursement flows and maturing flows (if within 30 days) of forward starting repo or reverse repo in report C52 and C53?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)
  • ID: 2014_872
  • Topic: Supervisory reporting - Liquidity (LCR, NSFR, AMM)
  • Date of submission:
  • Published as final Q&A: 20/02/2015

LCR Inflows: current accounts with other credit institutions

Article 425(2)(c) of Regulation (EU) No 575/2013 (CRR) specifies that assets with an undefined contractual end date shall be taken into account with a 20% inflow provided that the contract allows the institution to withdraw and request payment within 30 days. Do current accounts held with other credit institutions fall into that category? If not, how should these current accounts be reported?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1576
  • Topic: Liquidity risk
  • Date of submission:
  • Published as final Q&A: 20/02/2015

Short positions in financial institution capital instruments

(1) Where a bank holds an item which is treated as a financial institution capital instrument under CRR, can a guarantee or credit default swap over that instrument be considered a short position for the purposes of Articles 45(a), 59(a) or 69(a)? (2) Where a bank has an indirect holding of a financial institution capital instrument, can a guarantee or credit default swap over the host item be considered a short position in the underlying capital instrument for the purposes of Articles 45(a), 59(a) or 69(a)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1382
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 20/02/2015

Inclusion of interim profits / Deduction of losses in own funds

1. How should the interim profits be calculated for the purposes of inclusion in own funds? E.g. if the bank has monthly P/L as follows: Jan -10, Feb -20, March +100 (Year-to-date +70). The results are not verified by external audit. Should the bank take deduct the losses from Jan and Feb, but ignore the March gain as it is unaudited (capital impact compared to IFRS equity -100) or can the losses be netted with the gains and the YTD gain (unaudited) be filtered out (capital impact -70)? 2. What constitutes 'adequate level of assurance' in context of verification by external auditors? Is a full audit required or is an interim review sufficient?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_384
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 20/02/2015

Exemption of purchased receivables from Aricle 405's retention requirement

Do the provisions in Article 405(1) of Regulation (EU) No 575/2013 apply to purchased receivables?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1474
  • Topic: Securitisation and Covered Bonds
  • Date of submission:
  • Published as final Q&A: 20/02/2015

Risk Retention

Can the retention requirements under Article 405 of Regulation (EU) No 575/2013 (CRR) be satisfied by the provider of the junior/first loss funding for a CLO warehouse where such an entity has also been involved in the selection of the exposures and the setting of criteria, as it can be said, in such capacity, to be acting as "originator"? Also, where the warehouse provides financing for the acquisition of the majority of the exposures but further exposures are acquired from different sources after closing (and in accordance with pre-defined criteria), will this prevent the first loss warehouse provider from being the "originator"?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_265
  • Topic: Securitisation and Covered Bonds
  • Date of submission:
  • Published as final Q&A: 20/02/2015

Asset transfer in case of sale of business tool

What is the proper basis of transferring assets in case of sale of business tools as referred to in Article 38(1) of Directive 2014/59/EU (BRRD), is it the resolution authority decision or agreement?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1778
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Liabilities guaranteed by third parties subject to bail-in

The provisions regarding exclusion of "secured liabilities“ from bail-in contained in in Articles 2(2)(67) and 44(2)(b) of Directive 2014/59/EU (BRRD) seem to be ambiguous. We seek clarification as to whether liabilities guaranteed by third parties can be subject to bail-in?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1779
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Clarificaion of "value of an instrument" in Article 48(2)

We seek clarification regarding Article 48(2) of Directive 2014/59/EU (BRRD), the provision regarding write-down and conversion powers is unclear: the value of an instrument may fluctuate therefore the reference to “value” in Article 48(2) seems ambiguous. We wonder if value refers to the “face value” (“notional amount”) or to the “market value”?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1780
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Transfer of shareholders in the context of sale of business, Bridge Bank, Asset Separation

1. Is there any rationale for different terminology in Articles 43(2)(b)(i) and 43(2)(b)(ii) of Directive 2014/59/EU (BRRD)? What happens in a situation, when the bridge bank should be wholly owned by the Member State? Does it mean that bridge bank provisions must allow for partial State ownership, or does it mean that the power according to Article 43(2)(b)(i) should not be implemented? 2. What is the procedure for consecutive bail-in after the transfer tools is used?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1781
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Transfer of assets / Consideration paid by the purchaser

On the basis of Article 39(1) and 38(4)(b) of Directive 2014/59/EU (BRRD), where assets of the holding company are transferred, should the consideration paid by the purchaser benefit the holding, and not the institution under resolution?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1782
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Transfer of rights and liabilities in the context of the Asset Separation Tool

Can you clarify if there is a distinction between Article 42(1) and Article 42(3) of Directive 2014/59/EU (BRRD): does the assets separation tool allow Resolution Authorities to transfer rights and liabilities as well as assets?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1783
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Deposit Guarantee Scheme (DGS) contributions couning towards the 8% requirement

On what basis is the 8% in Article 44(5) of Directive 2014/59/EU (BRRD) to be applied? Do Deposit Guarantee Scheme (DGS) contributions count towards the 8% requirement?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1784
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Approval of business reorganisation plan

Does only the resolution authority have to be satisfied of the business reorganisation plan referred to in Article 52(7)(8) of Directive 2014/59/EU (BRRD) or is the support of the competent authority required also?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1785
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Resolution powers in relation to third country branches

Article 96 of Directive 2014/59/EU (BRRD) requires Member States to ensure resolution authorities have the powers necessary to act in relation to a third country branch. How can Member States comply with this requirement? What specific actions should the resolution authority be empowered to take in relation to a third country branch? How can a resolution authority take action against a branch given it is not a legal entity?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1786
  • Topic: Cross-border resolution
  • Date of submission:
  • Published as final Q&A: 06/02/2015

Relation between the sale of business tool and take-over bid requirements

Does the reference to 'securities law' in Article 38(1) of Directive 2014/59/EU (BRRD) relate to take-over bid requirements? In general, what is the approach to the exemption to apply securities law requirements? For example, in case of bail-in in for the conversion into capital instruments an alternative in given, and therefore the investor has to decide between two instruments but the conversion is mandatory, could the obligation of prospectus be overridden? The same for a capital increase with pre-emption rights?

  • Legal act: Directive 2014/59/EU (BRRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1787
  • Topic: Resolution tools and powers
  • Date of submission:
  • Published as final Q&A: 06/02/2015

On-balance sheet netting and exemption from the Large Exposures limits

Are on-balance sheet (OBS) netting agreements, where there are maturity mismatches between loans and deposits, eligible the exemption from the large exposures regime as laid down in Article 400 of Regulation (EU) No 575/2013 (CRR)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1508
  • Topic: Large exposures
  • Date of submission:
  • Published as final Q&A: 06/02/2015