The rule in plain words
Internal TLAC cannot be negative.
EBA checks it for 19 rows, from total risk exposure amount (0100) to excluded liabilities (0610). That makes 19 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.
Internal TLAC: Eligible liabilities and guarantees >= 0
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Look for a value with the wrong sign in these cells, such as an amount entered as a negative number.
- 03EBA compares the values exactly here: there is no rounding tolerance.
- 04It runs only when your filing indicators mark M 03.00 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
Internal MREL and internal TLAC (ILAC) (M 03.00)
Rows
- 0100Total risk exposure amount
- 0110Total exposure measure
- 0200Eligible own funds and eligible liabilities
- 0210Eligible Own funds
- 0220Common Equity Tier 1 capital (CET1)
- 0230Eligible Additional Tier 1
- 0240Eligible T2
- 0250Eligible liabilities and guarantees
- 0260Eligible liabilities (excluding guarantees)
- 0295Excess of deductions from eligible liabilities over eligible liabilities
- 0400Own funds and eligible liabilities as a percentage of the total risk exposure amount
- 0420Own funds and eligible liabilities as a percentage of the total exposure measure
- 0440CET1 (%) available after meeting the entity’s requirements
- 0500Combined buffer requirement (%)
- 0510Of which: capital conservation buffer requirement
- 0520Of which: countercyclical buffer requirement
- 0530Of which: systemic risk buffer requirement
- 0540Of which: Global Systemically Important Institution (G-SII) or Other Systemically Important Institution (O-SII) buffer
- 0610Excluded liabilities
Column
- 0020Internal TLAC
A worked example
The first of its checks, with simple numbers.
Eligible liabilities and guarantees, internal TLAC must then be at least 0.
A file that reports 0 passes. One that reports -100 fails, by 100.
The numbers are illustrative.
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}.
{M_03.00,r0250,c0020,} >= 0The next five:
{M_03.00,r0510,c0020,} >= 0{M_03.00,r0500,c0020,} >= 0{M_03.00,r0400,c0020,} >= 0{M_03.00,r0110,c0020,} >= 0{M_03.00,r0220,c0020,} >= 0And 13 more, the same formula for the other cells it covers.
Other rules on M 03.00
- The sum of three rows cannot be more than liabilities and own funds less excluded liabilities (v10817_m)Not run yet
- Eligible own funds, internal MREL plus eligible liabilities and guarantees, internal MREL cannot be more than own funds and eligible liabilities for the purpose of internal MREL (all sheets added up) (v10816_m)Warning
- Eligible liabilities (excluding guarantees) must equal eligible liabilities (v10815_m)Warning
- Other bailinable liabilities governed by third country law cannot be less than containing a write down and conversion clause (v10788_m)Warning
- Other bailinable liabilities cannot be less than other bailinable liabilities governed by third country law (v10786_m)Warning
- Other bailinable liabilities must equal the sum of its three parts (v10785_m)Warning
- Combined buffer requirement must equal the sum of its four parts (v10784_m)Warning
- Guarantees provided by the resolution entity and permitted by the resolution authority must equal permitted guarantees times total exposure measure (v10783_m)Warning
Every MREL and TLAC rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.