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

Eligibility of unconditional Financial Letters of Credit as eligible financial collateral

Can an unconditionally drawable Letter of Credit held by an institution as beneficiary be treated as a “cash assimilated instrument” eligible for inclusion by that institution as an item of Funded Credit Protection against an outstanding exposure position for a contingent future payment?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1917
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 06/01/2017

Correct application of credit conversion factors in relation to credit substitutes and shipping guarantees

According to Annex I Classification of off-balance sheet items:a) Paragraph 1. (a) guarantees having the character of credit substitutes are guarantees for the good payment of credit facilities. These guarantees bear full risk, therefore CCF of 100% is applied as stated in Article 111. Could you provide more examples or a definition of credit substitutes?b) Paragraph 2. (b). (i) shipping guarantees: could guarantees for payment of delivered goods and services be considered shipping guarantees?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2543
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 09/12/2016

Treatment of retail exposures secured by property under IRB

How should institutions treat a retail exposure for an SME that has a minor property collateral (and thus it is partly secured by immovable property) but the purpose of this loan is not property/mortgage finance? Are the correlation coefficient prescribed in Article 154(3) and the minimum LGD requirement in Article 164(4) applicable for the full exposure?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2599
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 18/11/2016

Assigning Specific Credit Risk Adjustments for a group of exposures to the exposures within the group

Following question 2013_499, could you confirm that this implies that the collective provisions allocated to specific portfolios for accounting purposes (FINREP) will agree at aggregate level with the amounts booked in the financial statements but the allocation for RWA to single exposures will differ from the allocation for accounting purposes to single exposures and thus a single exposure will show a different collective provision for accounting purposes (FINREP) than that for RWA?

  • 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: 2016_2574
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 18/11/2016

Application of Article 215(2)(b) of the CRR

Can the competent authorities be satisfied that the effects of a guarantee (which covers losses resulting from the non-payment of interest and other types of payments which the borrower is obliged to make) justify the treatment of eligible unfunded credit protection when the time of payment such guarantee is indeterminate? Are there other considerations that the competent authorities should take into account to be satisfied with the effects of the guarantee to justify such treatment, in addition to those listed in article 213 and 215(1)(b) and (c) of CRR?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2306
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 18/11/2016

Applying a currency mismatch haircut to OTC derivatives in a netting pool which are in a currency different from settlement currency

For OTC derivative transactions covered by master netting agreements, if the exposure (derivative) currency is different from the settlement currency, should the exposure amount be increased by the currency mismatch haircut?While calculating the replacement cost of the derivatives, should the exposure amount be increased by the currency mismatch haircut?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2394
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 11/11/2016

Classifications of loans to SPVs as to SME

How should the repayment of loans to SPV's (classified as SME) be considered for the purpose of Article 501 of Regulation (EU) No 575/2013 (CRR)? Should the original exposure amount be taken into account? 

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2711
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 11/11/2016

Appropriate risk weight for speculative immovable property financing

Does CRR Article 128 (1) provide that a 150% risk weight need not be applied to one or more exposures listed in CRR Article 128 (2) - including speculative immovable property financing - or that are identified in accordance with CRR Article 128 (3), on the basis that it would not be appropriate to apply that rate to such an exposure?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2268
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 21/10/2016

Retail exposures above EUR 1m - definition and understanding

Would a private individual client need to be regarded as "non retail" if the original exposure is above EUR 1 million (line EUR 2m) or could he stay in the "Retail" exposures class if his EAD is below EUR 1million (EAD close to zero) or the drawn amount is below euro 1m (drawn amount below EUR1m)?Clarity would be appreciated for both the standardised and IRB approach.

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2626
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 07/10/2016

Treatment of decreases of impairments in the calculation of the exposure value

In the context of published Q&A 2014_1087 how should a credit institution treat decreases of impairments, value adjustments or provisions (in case of reduced identified losses) recognised during the year, i.e. in the interim period, in the case where the competent authority has not given its permission to include the interim profit into the calculation of Common Equity Tier 1 capital, and the credit institution has not reflected the amounts with a corresponding "immediate reduction in Common Equity Tier 1 capital" although the changes in impairments, value adjustments or provisions for off-balance sheet items are reflected in interim profits or year-end profits?

  • 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: 2016_2629
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 23/09/2016

Splitting exposures

In the case that an exposure has attributes that it can be assigned into various exposure classes, may it be divided into two exposure classes?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2560
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 09/09/2016

Risk weight for exposures to central-government-risk Public Sector Entities (PSEs) denominated and funded in domestic currency

May exposures to PSEs established in a Member State, whose level of risk in the opinion of the competent authority of the Member State in question does not differ from the level of risk of the central government, be assigned a risk weight of 0% in accordance with Article 114(4) of CRR if they are denominated and funded in domestic currency?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2484
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 15/07/2016

Definition of “effective procedures” to monitor that the property taken as credit protection is adequately insured against the risk of damage.

What are the minimal criteria of adequate insurance of property against the risk of damage that the "procedures" should consist of in order to be assessed as effective?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2016_2685
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 24/06/2016

Procedury monitorowania ochrony kredytowej / EN: Credit protection monitoring procedures

Czy aby w procesie szacowania wymogu kapitałowego możliwe było uwzględnienie instrumentu ograniczania ryzyka kredytowego w postaci zabezpieczenia na nieruchomości mieszkalnej konieczne jest zapewnienie przez Instytucję, iż na dzień wyliczenia posiada ona aktualne ubezpieczenie tejże nieruchomości zabezpieczające przez ryzykiem powstania szkody? Czy może w myśl zapisów artykułu 208 paragraf 5 (literalnie czytając) wystarczy, iż Instytucja udowodni, iż posiada procedury i skuteczne mechanizmy monitorowania aktualności/ważności posiadanej polisy ubezpieczeniowej?EN translation:In order for the calculation of capital requirement to take into account collateral of residential property as a credit risk mitigation instrument, is it necessary for the Institution to ensure that, as at the calculation date, it holds up-to-date insurance for such real estate, protecting it against the risk of damage? Or perhaps, in accordance with the provisions of Article 208(5) CRR  (read literally), it would suffice if the Institution could prove that it has procedures and effective monitoring mechanisms in place to ensure that the existing insurance policies are valid and up-to-date?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2470
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 03/06/2016

Classification of exposures for which an IRB bank uses the standardised approach, into IRB exposure classes (Article 147 CRR)

Is there any regulation stipulating that for exposures where an IRB bank uses the standardised approach, these "standardised" exposures have to be classified into exposure classes valid for the standardised approach (Article 112 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: 2016_2559
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 03/06/2016

Classification of a performance bonds according to annex 1.

Does a performance bonds which guarantee satisfactory completion of a project by a contractor with an original maturity of more than one year qualify as Medium/low risk according to CRR, annex I, item 3(a)(ii) ?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2198
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 03/06/2016

Determination of the exposure at defaul in case of unfunded credit protection

Under the advanced approach, the IRB Approach, as permitted by the Title II - Chapter 3, does not specify the order of application of the Credit Conversion Factor (CCF) and of the credit protection when an off-balance sheet exposure is covered by an unfunded credit protection (e.g. a CDS, Credit Default Swap). Does CRR prevent from applying the credit protection on the Exposure At Default (i.e.: after application of the CCF for an off-balance sheet exposure)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2063
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 03/06/2016

Capital requirements deduction for credit risk on exposures to SMEs

Is capital requirement deduction (SME factor) applicable for specialised lending exposures if conditions determined in Article 501(2) of Regulation No 575/2013 (CRR) are met?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_2135
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 01/04/2016

Calculation of unsecured and secured parts of past due items – Standardised approach

Under the standardised approach, when calculating the unsecured part of the exposure for the purpose of computing provisions threshold (20%) under Article 127(1) of the CRR, shall the exposure exclude eligible financial collateral and credit protection that comply with the requirements stated in Part Three, Title II, Chapter 4 of the CRR, ‘Credit Risk Mitigations’, as well as residential real estate and commercial real estate as described in Article 127(3) & (4) of Regulation (EU) No 575/2013?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1918
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 01/04/2016

Risk weight in CCP-related exposures, rules on 2% AND 4% risk weight

For the purposes of Article 305 (3) is there loss protection if the condition in 305 (2) b) is met but not 305 (2) c)?

  • Legal act: Regulation (EU) No 575/2013 (CRR)
  • COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
  • ID: 2015_1946
  • Topic: Credit risk
  • Date of submission:
  • Published as final Q&A: 18/03/2016