The rule in plain words
Each of the values it checks in breakdown of financial assets cannot be more than zero.
EBA checks it for three columns: specific allowances for credit risk, general allowances for credit risk affecting carrying amount and general allowances for banking risk affecting carrying amount. And for 15 rows, from debt securities (0010) to non-trading financial assets measured at a cost-based method (0140). That makes 45 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.
General allowances for credit risk affecting carrying amount: Non-financial corporations <= 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 04.09 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
Rows
- 0010Debt securities
- 0020Central banks
- 0030General governments
- 0040Credit institutions
- 0050Other financial corporations
- 0060Non-financial corporations
- 0070Loans and advances
- 0080Central banks
- 0090General governments
- 0100Credit institutions
- 0110Other financial corporations
- 0120Non-financial corporations
- 0125Of which: Small and Medium-sized Enterprises
- 0130Households
- 0140NON-TRADING FINANCIAL ASSETS MEASURED AT A COST-BASED METHOD
Columns
- 0030Specific allowances for credit risk
- 0041General allowances for credit risk affecting carrying amount
- 0045General allowances for banking risk affecting carrying amount
A worked example
The first of its checks, with simple numbers.
Non-financial corporations, general allowances for credit risk affecting carrying amount can then be at most 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_04.09,r0120,c0041,} <= 0The next five:
{F_04.09,r0125,c0041,} <= 0{F_04.09,r0060,c0041,} <= 0{F_04.09,r0140,c0030,} <= 0{F_04.09,r0140,c0041,} <= 0{F_04.09,r0050,c0041,} <= 0And 39 more, the same formula for the other cells it covers.
Other rules on F 04.09
- Debt securities must equal the sum of its five parts (v5041_m)Warning
- Loans and advances must equal the sum of its six parts (v5042_m)Warning
- Equity instruments cannot be less than the sum of three rows (v5129_m)Warning
- Carrying amount minus assets under LOCOM, carrying amount must equal a calculation over seven columns (v5426_m)Warning
- Assets under LOCOM, carrying amount must equal the sum of its three parts (v5427_m)Warning
- Unimpaired assets must equal assets under LOCOM (v5428_m)Warning
- Impaired assets must equal assets under LOCOM (v5429_m)Warning
- Debt instruments at cost or at amortised cost: debt securities, gross carrying amount or nominal amount must equal a calculation over six cells (v5434_m)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.