The rule in plain words
Carrying amount cannot be negative.
EBA checks it for 20 rows, from derivatives (0005) to trading financial assets (0190). That makes 20 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.
Equity instruments >= 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 04.06 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
Breakdown of financial assets by instrument and by counterparty sector: trading financial assets (F 04.06)
Rows
- 0005Derivatives
- 0010Equity instruments
- 0020of which: unquoted
- 0030of which: credit institutions
- 0040of which: other financial corporations
- 0050of which: non-financial corporations
- 0060Debt securities
- 0070Central banks
- 0080General governments
- 0090Credit institutions
- 0100Other financial corporations
- 0110Non-financial corporations
- 0120Loans and advances
- 0130Central banks
- 0140General governments
- 0150Credit institutions
- 0160Other financial corporations
- 0170Non-financial corporations
- 0180Households
- 0190Trading financial assets
Column
- 0010Carrying amount
A worked example
The first of its checks, with simple numbers.
Equity instruments 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_04.06,r0010,c0010,} >= 0The next five:
{F_04.06,r0050,c0010,} >= 0{F_04.06,r0090,c0010,} >= 0{F_04.06,r0030,c0010,} >= 0{F_04.06,r0180,c0010,} >= 0{F_04.06,r0140,c0010,} >= 0And 14 more, the same formula for the other cells it covers.
Other rules on F 04.06
- Debt securities must equal the sum of its five parts (v5033_m)Blocking
- Loans and advances must equal the sum of its six parts (v5034_m)Blocking
- Equity instruments cannot be less than the sum of three rows (v5126_m)Blocking
- Loans and advances, carrying amount must equal the sum of its two parts (v23378_h)Warning
- Derivatives, carrying amount must equal the sum of its two parts (v23386_h)Warning
- Equity instruments, carrying amount must equal the sum of its two parts (v23390_h)Warning
- Debt securities, carrying amount must equal the sum of its two parts (v23397_h)Warning
- Trading financial assets, carrying amount must equal the sum of its two parts (v23404_h)Warning
Every FINREP 9 rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.