The rule in plain words
Total provisions and adjustments or deductions (capped) cannot be more than total minimum coverage requirement.
EBA checks it for nine columns, from >2 years <=3 years (0030) to total (0110). That makes nine checks. A failure names the one that failed.
How the Line4 Check report words itShowHide
The first of its checks, word for word as the report shows it when it fails. The others read the same, with their own column, row or sheet.
>6 years <=7 years: Total provisions and adjustments or deductions (capped) <= Total minimum coverage requirement
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Compare the values in your file. If the first is bigger than it may be, one of them is wrong: check both before you change either.
- 03EBA allows a small rounding difference, worked out from the decimals each value is reported with.
- 04It runs only when your filing indicators mark C 35.01 as reported.
- 05This is a warning. It does not stop the filing on its own, but your authority may ask you to explain it.
The cells it reads
NPE loss coverage: calculation of deductions for non-performing exposures (NPE lc1) (C 35.01)
Rows
- 0020Total minimum coverage requirement
- 0080Total provisions and adjustments or deductions (capped)
Columns
- 0030>2 years <=3 years
- 0040>3 years <=4 years
- 0050>4 years <=5 years
- 0060>5 years <=6 years
- 0070>6 years <=7 years
- 0080>7 years <=8 years
- 0090>8 years <=9 years
- 0100>9 years
- 0110Total
A worked example
The first of its checks, with simple numbers.
Total minimum coverage requirement must then be at least 1,200.
A file that reports 1,200 passes. One that reports 1,100 fails, by 100.
The numbers are illustrative, reported to the unit, so the rounding tolerance does not change the result.
Show the rule as writtenShowHide
EBA's formula, as written out for the first of its checks. Cells are written as {template, row, column, sheet}.
{C_35.01,r0080,c0070,} <= {C_35.01,r0020,c0070,}The next five:
{C_35.01,r0080,c0110,} <= {C_35.01,r0020,c0110,}{C_35.01,r0080,c0060,} <= {C_35.01,r0020,c0060,}{C_35.01,r0080,c0080,} <= {C_35.01,r0020,c0080,}{C_35.01,r0080,c0030,} <= {C_35.01,r0020,c0030,}{C_35.01,r0080,c0040,} <= {C_35.01,r0020,c0040,}And 3 more, the same formula for the other cells it covers.
Other rules on C 35.01
- Total provisions and adjustments or deductions (capped) cannot be more than total provisions and adjustments or deductions (uncapped) (v09652_m)Warning
- Total provisions and adjustments or deductions (uncapped) must equal the sum of its six parts (v09654_m)Warning
- Exposure value must equal unsecured part of NPEs plus secured part of NPEs (v09651_m)Warning
- Total minimum coverage requirement in C 35.01 must equal the sum of its two parts (row 0020, v09655_m)Warning
- Total minimum coverage requirement must equal unsecured part of NPEs (v09650_m)Warning
- Total minimum coverage requirement in C 35.01 must equal the sum of its two parts (row 0020, v09656_m)Warning
- Total minimum coverage requirement must equal the sum of its two parts (v09649_m)Warning
- Total minimum coverage requirement in C 35.01 must equal the sum of its two parts (row 0020, v09657_m)Warning
Every COREP own funds rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.