Leverage Exposure Exclusion for guaranteed parts of Export Credit

According to Article 429a(1)(f) of Regulation (EU) No 575/2013 (CRR) as amended, institutions may exclude from their total exposure measure the guaranteed parts of exposures arising from export credits, if the guarantee is provided by an eligible provider of unfunded credit protection in accordance with Articles 201 and 202 CRR and a 0% risk weight is applied to the guaranteed part of the exposure in accordance with Article 114(2) or (4) CRR or Article 116(4) CRR. Neither Article 114(2) or (4) CRR nor Article 116(4) CRR are limited to on-balance sheet exposures, but rather applicable to off-balance sheet items as well. Furthermore, Article 235 CRR explicitly allows for the application of credit risk protection for both on-balance sheet and off-balance sheet exposures. Therefore, as the treatment of exposures in accordance with Article 429a(1)(f) CRR follows the treatment of the respective exposures in accordance with Part Three, Title II CRR, both on-balance sheet and off-balance sheet exposures may be exempted from the total exposure measure in accordance with Article 429a(1)(f) CRR, provided the prerequisites of No (i) and (ii) of Article 429a(1)(f) CRR are met.