The rule in plain words
None of the values it checks in movements in allowances and provisions for credit losses (II) can be negative.
EBA checks it for two columns: increases due to origination and acquisition, and recoveries of previously written-off amounts recorded directly to the statement of profit or loss. And for five rows: commitments and financial guarantees given (Stage 1), commitments and financial guarantees given (Stage 2), commitments and financial guarantees given (Stage 3), commitments and financial guarantees given (Purchased or originated credit-impaired), and total provisions on commitments and financial guarantees given. That makes ten 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.
Increases due to origination and acquisition: Commitments and financial guarantees given (Stage 3) >= 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 F 12.01 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
Movements in allowances and provisions for credit losses (II) (F 12.01.b)
Rows
- 0530Commitments and financial guarantees given (Stage 1)
- 0540Commitments and financial guarantees given (Stage 2)
- 0560Commitments and financial guarantees given (Stage 3)
- 0565Commitments and financial guarantees given (Purchased or originated credit-impaired)
- 0570Total provisions on commitments and financial guarantees given
Columns
- 0020Increases due to origination and acquisition
- 0110Recoveries of previously written-off amounts recorded directly to the statement of profit or loss
A worked example
The first of its checks, with simple numbers.
Commitments and financial guarantees given (Stage 3), increases due to origination and acquisition 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}.
{F_12.01.b,r0560,c0020,} >= 0The next five:
{F_12.01.b,r0530,c0020,} >= 0{F_12.01.b,r0565,c0020,} >= 0{F_12.01.b,r0570,c0020,} >= 0{F_12.01.b,r0540,c0020,} >= 0{F_12.01.b,r0565,c0110,} >= 0And 4 more, the same formula for the other cells it covers.
Other rules on F 12.01.b
- None of the twelve values it checks in movements in allowances and provisions for credit losses (II) can be negative (v23155_s)Warning
- Each of the twelve values it checks in movements in allowances and provisions for credit losses (II) cannot be more than zero (v23154_s)Warning
- Decrease due to derecognition repayments and disposals cannot be more than zero (v23153_s)Warning
- Total provisions on commitments and financial guarantees given must equal the sum of its four parts (v5052_m)Blocking
Every FINREP 9 rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.