The rule in plain words
Accumulated negative changes in fair value due to credit risk cannot be more than zero.
EBA checks it for 15 rows, from debt securities (0060) to non-trading non-derivative financial assets measured at fair value to equity (0190). That makes 15 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.
Accumulated negative changes in fair value due to credit risk: Debt securities <= 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 04.08 as reported.
- 05This is a blocking check. A filing that fails it is normally rejected, so fix it before you submit.
The cells it reads
Rows
- 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
- 0175Of which: Small and Medium-sized Enterprises
- 0180Households
- 0190Non-trading non-derivative financial assets measured at fair value to equity
Column
- 0030Accumulated negative changes in fair value due to credit risk
A worked example
The first of its checks, with simple numbers.
Debt securities, accumulated negative changes in fair value due to credit risk 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_04.08,r0060,c0030,} <= 0The next five:
{F_04.08,r0070,c0030,} <= 0{F_04.08,r0080,c0030,} <= 0{F_04.08,r0090,c0030,} <= 0{F_04.08,r0100,c0030,} <= 0{F_04.08,r0110,c0030,} <= 0And 9 more, the same formula for the other cells it covers.
Other rules on F 04.08
- Each of the 100 values it checks in breakdown of financial assets cannot be more than zero (v5664_s)Warning
- Loans and advances, loans and advances subject to impairment must equal a calculation over ten cells (v5539_m)Warning
- Loans and advances, accumulated impairment must equal the sum of its nine parts (v5535_m)Warning
- A total-and-parts check across information on performing and non-performing exposures, and breakdown of financial assets (F 18.00.b, row 0201, v5503_m)Warning
- Households, accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions must equal the sum of its three parts (row 0197, v5502_m)Warning
- Loans and advances: non-financial corporations, accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions must equal the sum of its three parts (row 0196, v5501_m)Warning
- Loans and advances: other financial corporations, accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions must equal the sum of its three parts (row 0195, v5500_m)Warning
- Loans and advances: credit institutions, accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions must equal the sum of its three parts (row 0194, v5499_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.