EBA · 2014_1366 Final Q&A

Reporting of 10 largest exposures to institutions (correct counting in a case where 2 clients in a group of connected clients are institutions)

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
394, para. 2
Topic
Supervisory reporting - Large Exposures
Submitted by
Competent authority
Submitted
2014-07-15
Answered
2015-03-13
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

How should an institution count "top 10 exposures to institutions" in a case of an exposure to a group of connected clients in which an institution is a parent and there are at least 2 institutions in this group? a) As 1 (of 10) exposure to institutions – because a group of connected clients counts as one exposure when counting top 10 (no matter how many institutions there are in this group) b) As 2 (of 10) exposures to institutions - because there are two institutions in the group of connected clients with a parent institution.

Background

Unclear guidelines

Answer

According to Article 394 (2) of Regulation (EU) No 575/2013 (CRR) an institution shall report its 10 largest exposures on a consolidated basis to institutions as well as its 10 largest exposures on a consolidated basis to unregulated financial sector entities. The exposure of a group of connected clients itself counts as one of the 10 largest exposures to institutions or unregulated financial sector entities independent of the actual number of individual clients being institutions or unregulated financial sector entities and being members of this group. Option (a) (see Question) is the correct way to count the exposures.

Original source: European Banking Authority, Q&A ID 2014_1366

This Q&A is published by European Banking Authority and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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