EBA · 2016_2831 Rejected question

Treatment of irrevocable payment commitments according to Article 103(3) BRRD

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
111, 112, 134; 166, 147 156
Topic
Credit risk
Submitted by
Credit institution
Submitted
2016-07-15
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Question

How should payment commitments pursuant to Article 103(3) BRRD (Directive 2014/59/EU) be treated in the capital requirements for credit risk?

Background

According to Article 103 (3) BRRD the financing of resolution funds may include irrevocable payment commitments by the institutions. Payment commitments should be fully backed by collateral of low risk assets unencumbered by any third-party rights, at the free disposal and earmarked for the exclusive use by the resolution authorities. The decision to collect the payment commitments is the responsibility of the relevant resolution authority, not only depending on the creditworthiness of the institutions authorised in their territory. In the Regulation (EU) No 575/213 - CRR with regard to capital requirements for credit risk there are no provisions regarding the treatment of such payment commitments.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2016_2831

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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