EBA · 2015_2305 Final Q&A

Certificate of Deposits (CDs)

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
420, 421, 422, 423, 460, para. -
Topic
Liquidity risk
Submitted by
Credit institution
Submitted
2015-09-18
Answered
2016-05-13
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

How should we treat CDs (Certificate of Deposits) that we have issued? Could we treat them as deposit or should they be treated the same why as an issued senior bond?

Background

Some banks issue CDs for funding. When calculating LCR it is crucial to know how these are treated in the legal framework to know how much liquid assets are needed.

Answer

Certificates of Deposit (CDs) are to be treated as debt securities as long as they are negotiable and with the exception of those sold exclusively in the retail market and held in a retail account as outlined in Article 28(6) of the Commission Delegated Regulation (EU) 2015/61, in which case those instruments can be treated as the appropriate retail deposit category. Non-negotiable CDs should be treated as deposits of the relevant category.

Original source: European Banking Authority, Q&A ID 2015_2305

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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