EBA · 2014_908 Rejected question

Deductions of holdings of own funds instruments issued by financial sector entities included in the scope of consolidated supervision under art 49.2 CRR

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
49, para. 2
Topic
Own funds
Submitted by
Credit institution
Submitted
2014-03-06
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Question

For what specific purposes competent authorities may determine deductions of holdings of own funds instruments issued by financial sector entities included in the scope of consolidated supervision, apart from purposes mentioned in art 49.2: i.e. structural separation of banking activities and resolution planning? Should competent authorities determine deductions for all institutions in the member state or should it be more institution specific decision? In case of institution specific decision, should it be subject to joint decision, taken by the competent authorities of the home and host Member States?

Background

art 49.2 od CRR says: "2. For the purposes of calculating own funds on an individual basis and a sub-consolidated basis, institutions subject to supervision on a consolidated basis in accordance with Chapter 2 of Title II of Part One shall not deduct holdings of own funds instruments issued by financial sector entities included in the scope of consolidated supervision, unless the competent authorities determine those deductions to be required for specific purposes, in particular structural separation of banking activities and resolution planning." Competent authorities in one of the EU member states signalyse in different CRR-related quantitative exercises that they shall require banks to deduct holdings of own funds instruments issued by financial sector entities included in the scope of consolidated supervision, despite art 49.2, so far giving no reasoning for it.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2014_908

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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