The rule in plain words
None of the values it checks in asset encumbrance can be negative.
EBA checks it for 18 columns, from loans on demand (0010) to total (0180). And for nine rows, from central bank funding (of all types, including e.g. repos). Matching liabilities (0020) to other sources of encumbrance. contingent liabilities or securities lent (0180). That makes 162 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.
Households: Over-the-counter derivatives. Matching liabilities >= 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 36.01 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
Asset encumbrance: Advance template for assets of the reporting institution (b) (F 36.01.b)
Rows
- 0020Central bank funding (of all types, including e.g. repos). Matching liabilities
- 0040Exchange traded derivatives. Matching liabilities
- 0060Over-the-counter derivatives. Matching liabilities
- 0080Repurchase agreements. Matching liabilities
- 0100Collateralised deposits other than repurchase agreements. Matching liabilities
- 0120Covered bonds securities issued. Matching liabilities
- 0140Securitisations issued. Matching liabilities
- 0160Debt securities issued other than covered bonds and securitisations. Matching liabilities
- 0180Other sources of encumbrance. Contingent liabilities or securities lent
Columns
- 0010Loans on demand
- 0020Equity instruments
- 0030Total
- 0040Of which: covered bonds
- 0050Of which: issued by other entities of the group
- 0060Of which: securitisations
- 0070Of which: issued by other entities of the group
- 0080Of which: issued by general governments
- 0090Of which: issued by financial corporations
- 0100Of which: issued by non financial corporations
- 0110Central banks and general governments
- 0120Financial corporations
- 0130Non financial Corporations
- 0140Of which: loans collateralised with Immovable Property
- 0150Households
- 0160Of which: loans collateralised with Immovable Property
- 0170Other assets
- 0180Total
A worked example
The first of its checks, with simple numbers.
Over-the-counter derivatives. Matching liabilities, households 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_36.01.b,r0060,c0150,} >= 0The next five:
{F_36.01.b,r0100,c0170,} >= 0{F_36.01.b,r0080,c0110,} >= 0{F_36.01.b,r0060,c0100,} >= 0{F_36.01.b,r0160,c0050,} >= 0{F_36.01.b,r0060,c0180,} >= 0And 156 more, the same formula for the other cells it covers.
Other rules on F 36.01.b
- Total (column 0180) must equal the sum of its eight parts (v2919_m)Warning
- Loans collateralised with immovable property cannot be more than households (v2918_m)Warning
- Loans collateralised with immovable property cannot be more than non financial corporations (v2917_m)Warning
- Debt securities issued by non financial corporations cannot be more than total (v2916_m)Warning
- Debt securities issued by financial corporations cannot be more than total (v2915_m)Warning
- Debt securities issued by general governments cannot be more than total (v2914_m)Warning
- Securitisations issued by other entities of the group cannot be more than securitisations (v2913_m)Warning
- Securitisations cannot be more than total (v2912_m)Warning
Checks like this one, run at the point of submission, are the first step to real-time supervision.