The rule in plain words
None of the values it checks in geographical breakdown of assets can be negative.
EBA checks it for three columns: gross carrying amount, gross carrying amount held for trading or trading, and financial assets subject to impairment, including cash balances at central banks and other demand deposits. And for 25 rows, from derivatives (0010) to credit for consumption (0240). 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.
Of which: financial assets subject to impairment, including cash balances at central banks and other demand deposits: 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 20.04 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
Geographical breakdown of assets by residence of the counterparty (F 20.04)
Rows
- 0010Derivatives
- 0020Of which: credit institutions
- 0030Of which: other financial corporations
- 0040Equity instruments
- 0050Of which: credit institutions
- 0060Of which: other financial corporations
- 0070Of which: non-financial corporations
- 0075Cash balances at central banks and other demand deposits
- 0080Debt securities
- 0090Central banks
- 0100General governments
- 0110Credit institutions
- 0120Other financial corporations
- 0130Non-financial corporations
- 0140Loans and advances
- 0150Central banks
- 0160General governments
- 0170Credit institutions
- 0180Other financial corporations
- 0190Non-financial corporations
- 0200Of which: Small and medium sized enterprises
- 0210Of which: Loans collateralized by commercial immovable property
- 0220Households
- 0230Of which: Loans collateralized by residential immovable property
- 0240Of which: Credit for consumption
Columns
- 0010Gross carrying amount
- 0011Of which: held for trading or trading
- 0012Of which: financial assets subject to impairment, including cash balances at central banks and other demand deposits
A worked example
The first of its checks, with simple numbers.
Debt securities, financial assets subject to impairment, including cash balances at central banks and other demand deposits 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_20.04,r0080,c0012,} >= 0The next five:
{F_20.04,r0080,c0010,} >= 0{F_20.04,r0180,c0012,} >= 0{F_20.04,r0240,c0012,} >= 0{F_20.04,r0040,c0012,} >= 0{F_20.04,r0230,c0012,} >= 0And 69 more, the same formula for the other cells it covers.
Other rules on F 20.04
- Accumulated negative changes in fair value due to credit risk on non-performing exposures cannot be more than zero (v5698_s)Warning
- If accumulated impairment is not zero, gross carrying amount must be more than zero (v5007_m)Warning
- None of the 54 values it checks in geographical breakdown of assets can be negative (v4434_s)Warning
- Defaulted gross carrying amount cannot be more than non-performing gross carrying amount (v7903_m)Warning
- Households cannot be less than credit for consumption (v3152_m)Warning
- Non-financial corporations cannot be less than loans collateralized by commercial immovable property (v3151_m)Warning
- Households cannot be less than loans collateralized by residential immovable property (v3150_m)Warning
- Non-performing gross carrying amount cannot be more than gross carrying amount (v3137_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.