EBA · 2017_3128 Final Q&A

Treatment of interest outflows for retail deposits

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
421
Topic
Liquidity risk
Submitted by
Competent authority
Submitted
2017-01-26
Answered
2017-07-28
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

Should interest be reported - together with the deposit amount and be subject to the treatment provided by Articles 24/25 or - separately and be subject to the treatment provided by Article 31(10) a(1)  (any other outflows)?

Background

It is not clear if the interest is subject to the same outflow rate as retail deposits according to Articles 24/25 or subject to 100% outflow rate according to Article31(10). Articles 24/25 and the ITS on Supervisory Reporting do not provide any specific provisions regarding interest outflows. For interest inflows, the ITS on Supervisory Reporting provides instructions regarding these cash flows, and the interest inflows are subject to 100% inflow rate. According to point 141 from Basel standard, other contractual cash outflows (subject to 100% outflow rate) include contractual interest payments.

Answer

The interest of retail deposits should follow the treatment of relevant retail deposits, set out in Articles 24 and 25 of Delegated Regulation (EU) 2015/61, as long as they are credited on retail accounts.

Original source: European Banking Authority, Q&A ID 2017_3128

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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