EBA · 2024_7086 Rejected question

Specification and operationalisation of the phrase "at all times"

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
92, para. 1
Topic
Own funds
Submitted by
Credit institution
Submitted
2024-05-16

Question

How is the wording in Article 92 (1) CRR to be understood with regard to compliance with own funds requirements “at all times” in terms of verifiability?

Background

Article 92 (1) CRR states that institutions shall satisfy specific own funds requirements at all times. The wording "at all times" is clear in terms of content. But it cannot be operationalised in practice. Institutions have regular external reporting obligations. In addition, there are internal processes for regularly management reports about the development of capital ratios and other key risk parameters. There are many processes that are interlinked in the reporting of own funds requirements. The preparation of regulatory reporting and thus the concrete proof of compliance with capital adequacy requirements comprises numerous work steps and dependencies. The data must be collected from various banking systems and then processed in one or more calculation tools. This is followed by consolidation of data and final reporting out of the reporting software. In practice complexity and technical dependencies make it very difficult to provide actual and historicised proof of compliance with capital adequacy requirements in the literal sense “at all times” and it seem not always necessary due to low volatility.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2024_7086

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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