clarification which EBA Q&A to apply: EBA Q&A 2017_3277 or EBA Q&A 2023_6791

clarification which EBA Q&A to apply: EBA Q&A 2017_3277 or EBA Q&A 2023_6791

Assumes the following situation: August 23: a credit institution submits a request to call in March 24 own funds or eligible liabilities under CRR Art. 78 pt. 1(a) resp. CRR Art 78a pt. 1(a), i.e. the instrument to be called will be replaced with own funds or eligible liabilities instruments of equal or higher quality at terms that are sustainable for the income capacity of the institution September 2023: the replacement instrument is issued and effective; January 2024: the competent authority approves the call; February 2024: the credit institution announces the call to the holders of the instrument. How to report own funds and eligible liabilities on 30/09/23 and 31/12/23: Option 1: EBA Q&A 2017_3277 applies and therefore the to be called instrument is derecognized from own funds and/or eligible liabilities when the call is announced to the holders of the instrument, being February 2024. Consequently the replacing and replaced instruments are included in own funds and eligible liabilities simultaneously on 30/09/2023 and 31/12/2023. Option 2: EBA Q&A 2023_6791 applies and therefore the to be called instrument is derecognized from own funds and/or eligible liabilities when the replacement instrument becomes effective, being September 2023, despite no approval to call has been obtained from the competent or resolution authority and no announcement to the holders of the instruments has been made.