HQLA treatment of euro-denominated assets held in 3rd Countries

In the LCR DA, and subject to compliance with the caps in Article 17, can all Euro denominated net liquidity outflows of a credit institution, irrespective of where they arise, be covered by euro denominated Level 1 HQLA envisaged in Article 10(1)(d) and by Level 2b HQLA envisaged in Article 12(1)(c)(ii), in the latter case if not denominated in euro nor in the currency of the credit institution’s home Member State?

[Cognisant of question 2016_3048 ]   Article 10(1)(d) of Delegated Regulation (EU) 2015/61 (DR with regard to liquidity coverage requirement) permits deposits held with the (unrated) Central Banks of 3rd countries to be included in Level 1 HQLA, subject to the following restriction: “where the asset is not denominated in the domestic currency of the third country, the credit institution may only recognise the asset as level 1 up to the amount of the credit institution's stressed net liquidity outflows in that foreign currency corresponding to its operations in the jurisdiction where the liquidity risk is being taken”.   Similarly Art 12(1)(c) permits (demonstrably liquid) shares listed on a Stock Exchange in a 3rd country to be included in Level 2b HQLA, subject to (inter alia) the following restriction: “they are denominated in the currency of the credit institution's home Member State or, where denominated in a different currency, they count as level 2B only up to the amount to cover stressed net liquidity outflows in that currency or in the jurisdiction where the liquidity risk is taken”.   For illustration:   A Credit Institution operating in a non-Eurozone Member State, with Euro-denominated net outflows arising primarily (but not exclusively) in 3rd Country ('X'), the domestic currency of which is neither Euro, nor the home currency of the Credit Institution. Net Outflows are assumed to total €100.00, of which €86.00 relate to operations in Country 'X'.   1. The Credit Institution holds €86.00 'sight' deposits with the Central Bank of Country 'X' (which is not assigned a credit quality step 1 credit assessment by a nominated ECAI in accordance with Article 114(2) of Regulation (EU) No 575/2013).   2. The Credit Institution also holds shares listed on the primary Stock Exchange in Country 'X', which are denominated in the domestic currency of Country 'X', and which meet the "highly liquid" criteria set out in EU 2015/61 Art 12.1 c (iii); a haircut is applied in accordance with EU 2015/61 Art. 12.2 c, such that the Euro-equivalent market value of these assets amounts to €14.00. The Credit Institution proposes to aggregate qualifying Level 1 (Euro) and Level 2b (non-Euro) HQLA in order to offset its Euro-denominated Net Outflows arising both within Country ('X') and elsewhere, in order to maintain and LCR = (86 + 14) / 100 = 100%