The rule in plain words
None of the values it checks in breakdown of financial assets can be negative.
EBA checks it for five columns: assets without significant increase in credit risk since initial recognition (Stage 1), instruments with low credit risk, assets with significant increase in credit risk since initial recognition but not credit-impaired (Stage 2), credit-impaired assets (Stage 3), and purchased or originated credit-impaired financial assets. And for 15 rows, from debt securities (0050) to financial assets at fair value through other comprehensive income (0180). That makes 75 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.
Assets without significant increase in credit risk since initial recognition (Stage 1): Other 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 04.03.1 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
- 0050Debt securities
- 0060Central banks
- 0070General governments
- 0080Credit institutions
- 0090Other financial corporations
- 0100Non-financial corporations
- 0110Loans and advances
- 0120Central banks
- 0130General governments
- 0140Credit institutions
- 0150Other financial corporations
- 0160Non-financial corporations
- 0165Of which: Small and Medium-sized Enterprises
- 0170Households
- 0180FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
Columns
- 0015Assets without significant increase in credit risk since initial recognition (Stage 1)
- 0020of which: instruments with low credit risk
- 0030Assets with significant increase in credit risk since initial recognition but not credit-impaired (Stage 2)
- 0040Credit-impaired assets (Stage 3)
- 0041Purchased or originated credit-impaired financial assets
A worked example
The first of its checks, with simple numbers.
Other financial corporations, assets without significant increase in credit risk since initial recognition (Stage 1) 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_04.03.1,r0090,c0015,} >= 0The next five:
{F_04.03.1,r0070,c0030,} >= 0{F_04.03.1,r0170,c0030,} >= 0{F_04.03.1,r0100,c0020,} >= 0{F_04.03.1,r0050,c0015,} >= 0{F_04.03.1,r0050,c0040,} >= 0And 69 more, the same formula for the other cells it covers.
Other rules on F 04.03.1
- Carrying amount cannot be negative (v5658_s)Warning
- Loans and advances, loans and advances subject to impairment must equal the sum of its eight parts (v5538_m)Warning
- Loans and advances, accumulated impairment must equal the sum of its eight parts (v5534_m)Warning
- Loans and advances: non-financial corporations: > 30 days ≤ 90 days plus ≤ 30 days plus > 90 days cannot be more than the sum of four cells (v5424_m)Warning
- Loans and advances: other financial corporations: ≤ 30 days plus > 30 days ≤ 90 days plus > 90 days cannot be more than the sum of four cells (v5423_m)Warning
- Credit institutions: > 90 days plus > 30 days ≤ 90 days plus ≤ 30 days cannot be more than the sum of four cells (v5422_m)Warning
- Loans and advances: general governments: ≤ 30 days plus > 30 days ≤ 90 days plus > 90 days cannot be more than the sum of four cells (v5421_m)Warning
- Central banks: > 90 days plus ≤ 30 days plus > 30 days ≤ 90 days cannot be more than the sum of four cells (v5420_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.