Search for Q&As

Enquirers can use various factors to search for a Q&A:

  • These include searching by the Q&A ID; legal reference, date submitted, technical standard / guideline, or by keyword if known.
  • Searches can be extended to more than one legal act, topic, technical standard or guidelines by making multiple selections (i.e. pressing 'Ctrl' on your keyboard, and selecting the relevant ones from the drop-down lists by left mouse-click).

Note for users:

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. You should therefore check the date of publication and whether the provisions referred to in the final Q&As remain the same.

An overview of all the Q&As affected by the review of CRR-CRD and BRRD Q&As against the revised versions of those legislative acts following the amendments introduced in June 2019 can be accessed here (updated on 10.12.2021).

Please note that the Q&As related to the supervisory benchmarking exercises have been moved to the dedicated handbook page. You can submit Q&As on this topic here.

List of Q&A's

Use of the last available data for risk quantification sample

Given the requirements of Articles 179(1)(a) and 175(4)(b) CRR, in case of a model development, should the last available one-year snapshot be used for risk quantification purposes (i.e., for the computation of the long-run average default rate) or be set aside for out-of-time validation tests?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2017/16 - Guidelines on PD estimation, LGD estimation and the treatment of defaulted exposures

CCR treatment of exposures arising from centrally cleared transactions - indirect clearing flows

Does an institution which is a client of a clearing member or a lower-level client in a multi-level client structure (institution > intermediary/higher-level client > clearing member > central counterparty) need to verify that Art. 305 (2) or (3) conditions are met at every level of the structure to apply Art. 306 (1) CRR, which might also entail zeroing out the exposure value arising from the transaction between the institution and the clearing member or the higher-level client if the institution is acting as a financial intermediary between a client and a CCP? Guidance is sought on 4 possible clearing flows: Indirect clearing flows (clients’ transactions and institution’s own transactions) Client > institution > clearing member > CCP Institution > clearing member > CCP Multi-level indirect clearing flows (clients’ transactions and institution’s own transactions) Client > institution > intermediary/higher-level client > clearing member > CCP Institution > intermediary/higher-level client > clearing member > CCP

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Prospective remuneration plan for variable remuneration

What requirements must a remuneration plan fulfil in order to fall under the concept of “prospective remuneration plan for variable remuneration, including LTIPs, […] exclusively based on future performance conditions”, as per para. 139 of the EBA Guidelines, so that instruments awarded under then plan should exceptionally be valued for the purpose of the calculation of the ratio between variable and fixed components of the total remuneration with the market price or fair value at the time the prospective remuneration plan was granted? In particular, can an incentive plan which combines both short-term and long-term performance conditions fulfil the requirements of a “prospective remuneration plan” within the meaning of para. 139 of the EBA Guidelines?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2021/04 - Guidelines on sound remuneration policies under CRD (repealing EBA/GL/2015/22)

Determination of own funds requirements for gamma risk according to the ‘Delta plus approach’, for option positions in Exchange-traded funds (ETFs), when the reporting institutions apply the look-through method for the funds

How should the gamma impact be calculated for options positions on Exchange-traded funds (ETFs), when the look-through approach is applied to those funds and the components of the fund are from across several sectors?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 528/2014 - RTS on non-delta risk of options in the standardised market risk approach

Ability of the Share Premium to absorb losses

Can the Share Premium be recognised as CET1 capital if there are features preventing its use to absorb losses?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Share buybacks included in distribution policies

How and when should the share buyback ordinary component of an adopted profit distribution policy be reflected in the CET1 capital of institutions?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 241/2014 - RTS for Own Funds requirements for institutions

Share buyback program: amount of upfront deduction

Does the upfront deduction under Article 28(2) of Commission Delegated Regulation (EU) No 241/2014 as specified by Q&A 3277 include in addition to CET1 instruments and related share premium accounts also the other CET1 items that are reduced by a share buyback program authorized pursuant to Article 78(1)(b) CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 241/2014 - RTS for Own Funds requirements for institutions

Treatment of repurchase agreements and reverse repurchase agreement, as well as securities or commodities lending/borrowing of the banking book under standardised approach of credit risk.

Shall the transferor of an operation like the one described below include for credit risk capital requirements purposes both the exposure value of the securities sold (asset item) and the financing position (even if it is a liability item), or just the asset item of the securities sold?According to Article 111(2) CRR the exposure value of any repurchase transaction shall be included and be calculated either in accordance with Chapter 4 or Chapter 6 of Title II: does it also refers to the financing position of the transferor (even if it is a liability item)?What is the correct treatment for the financing position of the transferor? are securities also to be included as an exposure value in case the Financial Collateral Simple Method is used?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Preferential risk weight for indirect sovereign exposures in the currency of another Member State

May Article 500a be applied to exposure types other than government bond? May Article 500a paragraph 1 also be applied to indirect exposures, when the obligor is classified different from central governments or central banks? If so, the currency constraints imposed by the article 500a have to be referred to the unfunded credit protection of a central governments or central banks?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable

Identifying the customer of a collecting PSP

Does the fact that a collecting PSP (e.g. one providing the payment service acquiring of payment transactions to the payee) is involved in the flow of funds between the payer and the payee mean that the same PSP, if also providing merchant-facing payment initiation services, would have to assess the payer using PIS to be its customer in a different way than it would have to do if it were to provide PIS only (i.e. by way of deviation from what would otherwise apply according to Guideline 18.8 a of EBA/GL/2021/02))?

  • Legal act: Directive (EU) 2015/849 (AMLD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2021/02 - Guidelines on customer due diligence and the factors institutions should consider when assessing the ML /TF risk associated with individual business relationships and occasional transactions under Articles 17 and 18(4) of AMLD

Identifying the customer of a PISP

Is the assessment of who the customer is, from the perspective of a payment initiation service provider (PISP) with a merchant-facing business model (as referred to in Guideline 18.8 a) of EBA/GL/2021/02), affected by the frequency with which a single payer uses the PISP’s services?

  • Legal act: Directive (EU) 2015/849 (AMLD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2021/02 - Guidelines on customer due diligence and the factors institutions should consider when assessing the ML /TF risk associated with individual business relationships and occasional transactions under Articles 17 and 18(4) of AMLD

ITS ESG P3 - Annex II, Templates 10

1. Are general-purpose loans to pureplay companies in the scope of Template 10? 2. How sustainability linked loans with multiple sustainable performance targets be treated?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2022/2453 - ITS on ESG disclosures

ESG P3 - Template 3 - Indicators of potential climate change transition risk: Alignment metrics

In accordance with COMMISSION IMPLEMENTING REGULATION (EU) 2022/2453 in template 3, the institution shall disclose: 1/ Alignment metric(s) (column d) applied and the closest year of reference (column e) for the alignment metric(s) for each sector. Regarding the reference date, does it refer to the reporting date? Should it therefore have to change biannually depending on the publication of ESG Pillar 3? Otherwise, how often does it have to be updated?  2/ Institutions’ target for 3 years after the year of reference: If the reference year is different from the year of reporting (see question 1), for instance 2020 as reference date, then the target (column g) will be 2023 but as soon as the institution published the reporting for June 2024, this target won’t be relevant. Should the institution updated it and start again from 2023 as the reference date?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2022/2453 - ITS on ESG disclosures

Template 3 / Exposures to companies operating in several sectors

In Template 3, should corporate exposures corresponding to general-purpose financing lines be split across different sectors according to “the counterparties’ activity distribution, including by counterparties’ turnover by activity” (and therefore several different NACE codes), or should corporate exposures be fully allocated to one NACE code only corresponding to its main activity (as in template 1)? In the first option, how granular is the activity distribution expected to be reported, is there a minimum threshold of turnover to start reporting an activity? How is the information expected to be collected if not communicated by the corporates, can external data providers be used?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/637 - ITS with regard to disclosures of information referred to in Titles II and III of Part Eight CRR

Template 3 / Level of NACE codes to use

In Template 3, different levels of NACE code are indicated (level 1, 2, 3 or 4). What does this mean in practice, should banks report their full exposures falling under each level, or should exposures be reported in one category only? For example, for the fossil fuel sector a level-one NACE code is indicated (NACE code “6”) along with level 2 and 3 NACE codes (NACE code 61, 610…) – should exposures reported under code 610 also be included in exposures reported under 61 and 6? Please note that some NACE codes are overlapping (e.g. NACE code 8 is proposed for fossil fuel combustion and NACE code 89 is proposed for cement) – should exposures reported under 89 also be included in exposures reported under 8?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/637 - ITS with regard to disclosures of information referred to in Titles II and III of Part Eight CRR

Inclusion of repurchase transactions in financial assets and exposure value/risk-weighted assets (COREP C33).

What is the method to be followed concerning the inclusion of repurchase transactions in financial assets and exposure value/risk-weighted assets in COREP template C 33.00?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions

Calculation of “Total exposure” and other concepts in G 01.00 (G-SII indicators and EBU items)

It is not clear from the instructions how to calculate the total exposure measure (and other measures) and their relation to the leverage ratio exposure measure reported in C 47.00.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions

Application of the behavioural assumption of a 5-year cap for non-maturity deposits

Regarding paragraph 111 of the Guidelines on Interest Rate Risk in the Banking Book (EBA/GL/2022/14), and in relation to Article 98(5a) of the CRD, could you please confirm that the behavioural assumption of a 5-year cap on the average repricing of non-maturing deposits should not be understood as a modelling requirement neither for the Supervisory Outlier Tests (SOT) nor for the ongoing management of interest rate risk but as an alternative and additional measure of interest rate risk that complements the existing IRBB management framework?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: EBA/GL/2022/14 - Guidelines on interest rate risk arising from non-trading book activities

Prudent Valuation: Reporting of AVAs in C 32.03

How should the AVAs of model risk be reported in the template C 32.03. Can the Fair Value Adjustments linked to Model Risk, Model Risk UCS y Model Risk I&FC AVAs be included into the C 32.03?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions