EBA · 2025_7530 Rejected question

LCR treatment of cashier’s cheques

Regulation
Regulation (EU) No 575/2013 (CRR)
Article
422
Topic
Supervisory reporting - Liquidity (LCR, NSFR, AMM)
Submitted by
Credit institution
Submitted
2025-07-21
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Question

What should be the correct LCR representation of a cashier’s cheque in terms of outflow rate and ITS category according to the C73 template? Is it appropriate to consider the amount net of the collateral posted?

Background

There is no specific legal provision about the treatment of the cashier’s cheques. A cashier’s cheque represents a credit instrument issued by the bank whereby the holder or beneficiary can collect the amount indicated. Since a cashier’s cheque is used to guarantee that funds are available for payment, the bank charges the amount to the client’s account when the cheque is issued. As a consequence, the LCR includes the impact of the cheque issues in terms of a decrease of clients’ deposits. Moreover, the bank pledges liquid securities as collateral to guarantee the amount of cheques issued (minimum 20%), thus generating a decrease of the available liquid assets.
No answer published yet.

Original source: European Banking Authority, Q&A ID 2025_7530

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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