EBA · 2019_4920 Rejected question

Inclusion (or not) of a particular "timing loss" in the C 16.00 and C 17.00 template

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
324
Topic
Operational risk
Submitted by
Credit institution
Submitted
2019-09-18
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Question

Shall a particular "timing loss" in the Operational Risk Losses be included or not in the reporting template for operational risk?

Background

The question is related to the application of the Final Draft RTS on AMA Assessment and of the Regulation 680/2014 regarding the reporting of a particular Operational Risk Losses. We consider a case where a Bank discovers that for a number of years there has been an erroneous calculation in deposit interest, for a specific product, resulting in crediting more interest than initially defined according to the product specifications to specific client deposits. The event occurred during the life of the product and spanned over several years. As a result of the above, the Bank’s profit and loss account would have been charged with a higher amount of interest expenses than it should have according to the Banks pricing policies on deposits. Due to the complexity of the case, the Bank would estimate the approximate amount of excessive interest paid to clients over the years, using specific assumptions and restrictions. A decision would also need to be taken as to the recovery of the excess interests credited to the clients’ deposits.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2019_4920

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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