The rule in plain words
If ratio of holdings of own funds instruments issued by liquidation entities over eligible own funds and eligible liabilities is more than 0.07, own funds instruments issued by liquidation entities of the same resolution group cannot be less than the absolute value of (-) of which: own funds instruments issued by liquidation entities.
All the values are in the internal MREL column (0010) of M 03.00.
The headline gives only the kind of check and the template, because the rule is too long to say in a headline. The plain words above say all of it.
How the Line4 Check report words itShowHide
Word for word as the report shows it when the rule fails.
Internal MREL: If Ratio of holdings of own funds instruments issued by liquidation entities over eligible own funds and eligible liabilities > 0.07, then Own funds instruments issued by liquidation entities of the same resolution group >= the absolute value of (-) of which: Own funds instruments issued by liquidation entities
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02The check applies only when its first part holds in your file. When it does, the second part must hold too: fix the second part, or correct the first.
- 03EBA allows a small rounding difference, worked out from the decimals each value is reported with.
- 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
- 0293(-) of which: Own funds instruments issued by liquidation entities
- 0620Own funds instruments issued by liquidation entities of the same resolution group
- 0630Ratio of holdings of own funds instruments issued by liquidation entities over eligible own funds and eligible liabilities
Column
- 0010Internal MREL
Show the rule as writtenShowHide
EBA's formula. Cells are written as {template, row, column, sheet}.
if ({M_03.00,r0630,c0010,} > 0.07) then ({M_03.00,r0620,c0010,} >= abs({M_03.00,r0293,c0010,})) else TrueOther rules on M 03.00
- A conditional check on internal MREL and internal TLAC (ILAC) (v22546_m)Warning
- Each of the six values it checks in internal MREL and internal TLAC (ILAC) cannot be more than zero (v22357_s)Warning
- Own funds and eligible liabilities as a percentage of the total exposure measure cannot be less than permitted guarantees (v22345_m)Warning
- Own funds and eligible liabilities as a percentage of the total risk exposure amount cannot be less than permitted guarantees (v22344_m)Warning
- A lower-limit check on internal MREL and internal TLAC (ILAC) (v22340_m)Warning
- Internal TLAC cannot be negative (v10840_s)Warning
- 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
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.