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).

Disclaimer:

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.

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.

Final Q&As Q&As under review Rejected Q&As Archived Q&As All Q&As

List of Q&A's

FINREP Table 31 - Related parties - derecognition of non-financial assets

In Annex V in paragraph 2.122 it is stated that "this item should include the gains and losses on derecognition of non-financial assets, which have been generated by transactions with related parties". Further on it is stated in 2.122 a) that "gains or losses on derecognition of investements in subsidiaries, joint ventures and assiciates" should be included in this line item. (r070 in table 31.2). My question is therefore: If a financial institution sells a part of its shares (equity investemet) in a associate to a third party, is this considered as a non-financial asset, and hence a non-financial derecognition in the balance sheet?

  • 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Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)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_992
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 16/01/2015

FINREP Templates 8.1 and 8.2

Is FINREP template 8.2 a subset of FINREP template 8.1, or is it separate, and therefore the data should not be included within template 8.1?

  • 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Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 680/2014 - ITS on supervisory reporting of institutions (repealed)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_988
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 16/01/2015

Treatment of Exposures to ‘Civil-law associations’

In case of exposures to 2 different partners belonging to a group of connected clients (A). and belonging at the same time to a civil low association (B), as required by the ITS, the exposure to the civil low shall be added to the exposure of each partner. In our example, do we have to add the total civil law exposure (B) (in case we cannot define the pro-quota) to both partners? In this case, when considering the exposure to the group (A) - in the template LE2 - we take two times the same exposure to the civil law.

  • 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_984
  • Topic: Supervisory reporting - Large Exposures
  • Date of submission:
  • Published as final Q&A: 16/01/2015

Transitional adjustments in regards to Goodwill in CA5.1

Please specify where to report the transitional adjustments in regards to Goodwill in CA.5.1 (Transitional provisions).

  • 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_966
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as final Q&A: 16/01/2015

Additional Reporting templates for FINREP (large exposures)

On January 8, 2014 European Commission published an updated Draft Implementing Technical Standards with regard to supervisory reporting of institutions according to regulation (EU) No 575/2013 (attached). Per the article 9 of the document, paragraph (g) as well as article 11 paragraph (g), European Commission stated the following: (g) the information specified in Annex VIII for exposures whose exposure value is larger than or equal to 300 million EUR but less than 10 % of the institution’s eligible capital with a quarterly frequency. Questions: 1) The specification above deviates from the current requirements for large exposures, as described per the instructions in Annex IX (ITS), as paragraph (g) requires the reporting of exposures less than 10 % of the institution’s eligible capital. (Whereas Annex IX requires reporting of exposures equal to or exceeding 10% of the institution’s eligible capital (Article 392 CRR). Does this imply that the templates specified in Annex VIII of ITS, which currently refer to Large Exposures, and which are reported under COREP, should be also included in the FINREP financial reporting? 2) As the templates currently specified in Annex VIII of ITS have some of the same references already reported in FINREP (for example, tables 30-31), will EBA be issuing an updated Annex VIII only as applicable for FINREP. If yes, when these temples will be available/when are the institutions expected to report them?

  • 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_939
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 16/01/2015

Reporting of two groups of connected clients when one client is considered as the most significant entity within both groups

How should an institution report two different groups of connected clients / which "code" should it use, if one client is considered as most significant entity within both groups?

  • 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_920
  • Topic: Supervisory reporting - Large Exposures
  • Date of submission:
  • Published as final Q&A: 16/01/2015

Specific credit risk adjustments on exposures in default

Taking into account Annex I of the own funds template (worksheet 4, line 100 and 145) it’s clear that IRB Excess (+) or shortfall (-) of defaulted and non-defaulted exposures has to be reported separately. What is not exactly clear is the fact if an IRB Excess for the non-defaulted exposure can for example be taken into account for the defaulted portfolio or not.

  • 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_573
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 16/01/2015

Classification of in default exposures that are at the same time is an Item Associated with Particular High Risk

Following the decision tree, it is clear that "Items Associated with Particular High Risk" take precedence over "Exposures in Default". However, if for example we have a case of speculative immovable property financing that is in default where do we classify it? If we include the exposure in the Associated with Particular High Risk class, then during COREP review or other regulatory review exercises, it might not give the correct picture for the level of in default exposures that an institution has in its portfolio. Shall the in default items with particular high risk be classified in the "In default" exposure class?

  • 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_847
  • Topic: Supervisory reporting - COREP (incl. IP Losses)
  • Date of submission:
  • Published as final Q&A: 16/01/2015

Capital requirements for a subgroup integrated by a parent holding company in a Member State and its institutions and subsidiary financial institutions

What are the capital requirements for the subgroup and/or any of the undertakings included in it if the Member State: i) imposes capital requirements for the holding company by virtue of a national law? ii) does not impose any additional requirements to those in the CRR? As it is explained in the “background on the question”, we understand that for the second question (ii), the following topics must be clarified: a) What is the scope of the sub-consolidation, i.e. which companies need to be included in the respective sub-consolidation group? b) Are the capital requirements to be applied at the “subsidiary institution” level or at the “parent holding in the member state” level?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2013_521
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 09/01/2015

Residence of the counterparty - short positions

Table 20.6 of FINREP contains a geographical breakdown of liabilities by residence of the counterparty. Nonetheless, there is no guidance on how to determine the counterparty in the case of short positions.

  • 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_888
  • Topic: Supervisory reporting - FINREP (incl. FB&NPE)
  • Date of submission:
  • Published as final Q&A: 19/12/2014

Treatment of Hedges for Equity-Linked Employee Compensation Schemes and Impact on FSE Capital Deductions

As part of their Corporate Equity Derivatives businesses, European banks are often asked to provide Financial Sector Entity (“FSE”) and non-FSE clients with hedges to their equity-linked employee compensation schemes or share savings plans. Typically in these circumstances the client goes long its own equity price risk synthetically, via purchasing call options or buying a total return swap (“TRS”). The TRS is an ISDA-based derivative contract under which the purchaser (in this case the client) receives the dividend and any price appreciation on the underlying equity security, and the seller (in this case the bank) receives a LIBOR / EURIBOR return plus a spread, along with any price depreciation on the underlying equity security. As the bank is short the client’s equity price risk under the TRS contract, it will typically purchase the client’s physical shares in the market in order to hedge the delta exposure under the sold TRS position. These positions are allocated to the regulatory trading book subject to the applicable requirements, and for the purposes of this discussion it is assumed the short position satisfies either the CRR Art 45 maturity matching criteria or the CRR Art 75 exemption. Where the bank has credit risk to the client (under the TRS), the client will, in most circumstances, be asked to provide cash margin on a daily basis to cover any mark-to-market movements in the bank’s favour. The TRS will be documented using standard ISDA documentation, with the cash collateralisation taking place under a CSA or similar arrangement. Would the TRS be considered an eligible hedge for the purposes of Article 45 under those circumstances?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1509
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 19/12/2014

Internal model for correlation trading

For an internal model for incremental default risk and migration risk “an institution may choose to consistently use a one-year constant position assumption.” (Second sentence of Article 374 (4) of Regulation (EU) No 575/2013 (CRR)). Does an institution also have this choice for an internal model for correlation trading?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1422
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 19/12/2014

Inclusion of partial write-offs in credit risk adjustments

Are partial write-offs of loans in the banking book, accounted at amortised cost, to be included in the determination of specific and general credit risk adjustments set out in Article 110(4).

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Regulation (EU) No 183/2014 - RTS for the calculation of specific and general credit risk adjustments
  • ID: 2014_1064
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 19/12/2014

Country of transaction, scope of disclosures and intragroup transactions

It is expected that transactions will be attributed to the country of the unit of the group that is party to the transaction. How should intra-group cross-border transactions and consolidation adjustments be treated? How should the impact of associates and joint ventures on the reported figures be dealt with?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1045
  • Topic: Other issues
  • Date of submission:
  • Published as final Q&A: 19/12/2014

Location of disclosures and audit consequences

Should or could the country-by-country reporting requirements be included in the notes to the financial statements, which represent an inherent part of these statements, or does the requirement ask to design a new separate annex to the financial statements?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1044
  • Topic: Other issues
  • Date of submission:
  • Published as final Q&A: 19/12/2014

Definitions of reportable items

The disclosure requirements use terms which need to be defined to ensure consistency of disclosures provided by institutions and audited by their auditors. In this context we seek clarification concerning tax as referred to in Article 89(1)(d) and (e) of Directive 2013/36/EU (CRD). Does it contain only current tax expense or also deferred tax? If deferred tax is included, does it comprise only the profit or loss element, or also changes in deferred tax recognised in other comprehensive income? Alternatively, should it include only the tax cash-flows made in the relevant period?

  • Legal act: Directive 2013/36/EU (CRD)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1043
  • Topic: Other issues
  • Date of submission:
  • Published as final Q&A: 19/12/2014

Article 89 of Regulation (EU) No. 575/2013 (CRR) – risk weighting and prohibition of qualifying holdings outside the financial sector

This question is about the valuation of qualifying holdings outside the financial sector in order to determine whether the 15 % cap under Article 89 of Regulation (EU) No 575/2013 (CRR) is exceeded or not. It is also in relation with the phase out of unrealized gains measured at fair value under Article 468.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_749
  • Topic: Own funds
  • Date of submission:
  • Published as final Q&A: 19/12/2014

Recognition of contractual netting agreements by the competent authority

Should the provision of Article 296(1) of Regulation (EU) No 575/2013 (CRR) that “competent authorities shall recognise a contractual netting agreement …” be understood as a requirement to have an acceptance made by the supervisory authority, in particular in the course of performing its on-site or off-site activities, or rather to receive a formal permission (e.g. in a form of an administrative decision) of a competent authority?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2014_1424
  • Topic: Market risk
  • Date of submission:
  • Published as final Q&A: 12/12/2014