Scope of temporary treatment of unrealised gains and losses measured at fair value through other comprehensive income in view of the COVID-19 pandemic

Do exposures to “central governments, regional governments, local authorities and public sector entities” referred to in article 468 (1) of the CRR should be identified before or after applying credit risk mitigation techniques?Do exposures to “central governments, regional governments, local authorities and public sector entities” referred to in article 468 (1) of the CRR should be identified before or after applying credit risk mitigation techniques?

As per article 468 (1) of CRR, institutions may temporary remove from the calculation of their Common Equity Tier 1 applicable part of unrealised gains and losses (…) accounted for as ‘fair value changes of debt instruments (…), corresponding to exposures to central governments, to regional governments or to local authorities referred to in Article 115(2) of CRR and to public sector entities referred to in Article 116(4) of CRR (…). Recital (15) of preamble to Regulation (EU) 2020/873 states that this is established “In order to mitigate the considerable negative impact of the volatility in central government debt markets during the COVID-19 pandemic on institutions’ regulatory capital and therefore on institutions’ capacity to lend to clients (…).” In Poland some instruments (issuances) included in central government debt according to “EDP general government deficit/debt” procedure ( https://ec.europa.eu/eurostat/web/government-finance-statistics/excessiv... ) for the purpose of CRR are not initially (originally) assigned to classes: “exposures to central governments or central banks” nor “exposures to regional governments or local authorities” nor “exposures to public sector entities”. Instead, depending on the issuer, they are assigned to original exposure class “exposures to institutions” or “exposures to corporates”.  However, as those issuances are done to secure funds needed to support counteracting COVID-19 (see: https://www.en.bgk.pl/funds/covid-19-response-fund/ and https://www.en... https://pfrsa.pl/en/investor-relations/bonds.html ) and are guaranteed by State Treasury, after applying credit risk mitigation techniques (State Treasury guarantees) they are classified as “exposures to central governments or central banks”. As article 468 (1) doesn’t refer to CRM techniques, it is therefore unclear whether it applies in such cases.