EBA · 2017_3129 Final Q&A

Outflows associated with Payment Institutions' escrow accounts

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
422, 460
Topic
Liquidity risk
Submitted by
Credit institution
Submitted
2017-01-26
Answered
2017-05-12
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

Can the escrow accounts held for Payment Institutions be considered as operational deposits ?

Background

Payment Institutions are legally required to transfer the funds they receive to dedicated escrow accounts. These accounts are generally held in the books of Credit Institutions and mirror the deposits collected by the Payment Institutions. Payment Institutions cannot withdraw these funds freely.

Answer

Deposits that are maintained by payment institutions in accordance with their legal obligation to safeguard funds received from their clients (e.g. escrow accounts) may be considered as operational deposits raised in the context of an established operational relationship according to Article 27(1)(a) of the Commission Delegated Regulation (EU) 2015/61 (LCR DA) to the extent that the conditions set out in Article 27(4) LCR DA are met.

Original source: European Banking Authority, Q&A ID 2017_3129

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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