The rule in plain words
None of the values it checks in off-balance sheet exposures can be negative.
EBA checks it for nine columns, from instruments without significant increase in credit risk since initial recognition (Stage 1) (0010) to provision (0110). And for 24 rows, from loan commitments given (0010) to households (0240). That makes 216 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.
Purchased or originated credit-impaired instruments: General governments >= 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 09.01.1 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
Off-balance sheet exposures : loan commitments, financial guarantees and other commitments given (F 09.01.1)
Rows
- 0010Loan commitments given
- 0021of which: non-performing
- 0030Central banks
- 0040General governments
- 0050Credit institutions
- 0060Other financial corporations
- 0070Non-financial corporations
- 0080Households
- 0090Financial guarantees given
- 0101of which: non-performing
- 0110Central banks
- 0120General governments
- 0130Credit institutions
- 0140Other financial corporations
- 0150Non-financial corporations
- 0160Households
- 0170Other Commitments given
- 0181of which: non-performing
- 0190Central banks
- 0200General governments
- 0210Credit institutions
- 0220Other financial corporations
- 0230Non-financial corporations
- 0240Households
Columns
- 0010Instruments without significant increase in credit risk since initial recognition (Stage 1)
- 0020Instruments with significant increase in credit risk since initial recognition but not credit-impaired (Stage 2) (Stage 2)
- 0030Credit-impaired instruments (Stage 3)
- 0035Purchased or originated credit-impaired instruments
- 0040Instruments without significant increase in credit risk since initial recognition (Stage 1)
- 0050Instruments with significant increase in credit risk since initial recognition but not credit-impaired (Stage 2) (Stage 2)
- 0060Credit-impaired instruments (Stage 3)
- 0100Nominal amount
- 0110Provision
A worked example
The first of its checks, with simple numbers.
General governments, purchased or originated credit-impaired 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_09.01.1,r0040,c0035,} >= 0The next five:
{F_09.01.1,r0120,c0050,} >= 0{F_09.01.1,r0190,c0040,} >= 0{F_09.01.1,r0240,c0030,} >= 0{F_09.01.1,r0060,c0100,} >= 0{F_09.01.1,r0181,c0100,} >= 0And 210 more, the same formula for the other cells it covers.
Other rules on F 09.01.1
- Nominal amount cannot be negative (v5680_s)Warning
- Accumulated negatives change in fair value due to credit risk on non-performing commitments cannot be negative (v5681_s)Warning
- Other commitments given cannot be less than non-performing other commitments given (v5365_m)Warning
- Financial guarantees given cannot be less than non-performing financial guarantees given (v5364_m)Warning
- Loan commitments given cannot be less than non-performing loan commitments given (v5363_m)Warning
- Commitments and financial guarantees given (Stage 1), closing balance must equal the sum of its three parts (v6047_m)Warning
- Commitments and financial guarantees given (Stage 2), closing balance must equal the sum of its three parts (v6048_m)Warning
- Commitments and financial guarantees given (Stage 3), closing balance must equal the sum of its three parts (v6049_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.