The rule in plain words
Gross loss amount (new events) cannot be less than these four added up:
- Related to losses >= 10,000 and < 20,000
- Related to losses >= 20,000 and < 100,000
- Related to losses >= 100,000 and < 1,000,000
- Related to losses >= 1,000,000
EBA checks it for eight columns: internal fraud, external fraud, employment practices and workplace safety, clients, products & business practices, damage to physical assets, business disruption and system failures, execution, delivery & process management, and total event types. That makes eight 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.
EMPLOYMENT PRACTICES AND WORKPLACE SAFETY: Gross loss amount (new events) >= of which related to losses >= 10,000 and < 20,000 + of which related to losses >= 20,000 and < 100,000 + of which related to losses >= 100,000 and < 1,000,000 + of which related to losses >= 1,000,000
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Compare the values in your file. If the first is smaller than it may be, one of them is wrong: check both before you change either.
- 03EBA allows a small rounding difference, worked out from the decimals each value is reported with.
- 04It runs only when your filing indicators mark C 17.01 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
Operational risk: losses and recoveries by business lines and event types in the last year (C 17.01.a)
Rows
- 0920Gross loss amount (new events)
- 0921of which related to losses >= 10,000 and < 20,000
- 0922of which related to losses >= 20,000 and < 100,000
- 0923of which related to losses >= 100,000 and < 1,000,000
- 0924of which related to losses >= 1,000,000
Columns
- 0010INTERNAL FRAUD
- 0020EXTERNAL FRAUD
- 0030EMPLOYMENT PRACTICES AND WORKPLACE SAFETY
- 0040CLIENTS, PRODUCTS & BUSINESS PRACTICES
- 0050DAMAGE TO PHYSICAL ASSETS
- 0060BUSINESS DISRUPTION AND SYSTEM FAILURES
- 0070EXECUTION, DELIVERY & PROCESS MANAGEMENT
- 0080TOTAL EVENT TYPES
A worked example
The first of its checks, with simple numbers.
Gross loss amount (new events) must then be at least 2,750.
A file that reports 2,750 passes. One that reports 2,650 fails, by 100.
The numbers are illustrative, reported to the unit, so the rounding tolerance does not change the result.
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}.
{C_17.01.a,r0920,c0030,} >= {C_17.01.a,r0921,c0030,} + {C_17.01.a,r0922,c0030,} + {C_17.01.a,r0923,c0030,} + {C_17.01.a,r0924,c0030,}The next five:
{C_17.01.a,r0920,c0080,} >= {C_17.01.a,r0921,c0080,} + {C_17.01.a,r0922,c0080,} + {C_17.01.a,r0923,c0080,} + {C_17.01.a,r0924,c0080,}{C_17.01.a,r0920,c0070,} >= {C_17.01.a,r0921,c0070,} + {C_17.01.a,r0922,c0070,} + {C_17.01.a,r0923,c0070,} + {C_17.01.a,r0924,c0070,}{C_17.01.a,r0920,c0060,} >= {C_17.01.a,r0921,c0060,} + {C_17.01.a,r0922,c0060,} + {C_17.01.a,r0923,c0060,} + {C_17.01.a,r0924,c0060,}{C_17.01.a,r0920,c0010,} >= {C_17.01.a,r0921,c0010,} + {C_17.01.a,r0922,c0010,} + {C_17.01.a,r0923,c0010,} + {C_17.01.a,r0924,c0010,}{C_17.01.a,r0920,c0020,} >= {C_17.01.a,r0921,c0020,} + {C_17.01.a,r0922,c0020,} + {C_17.01.a,r0923,c0020,} + {C_17.01.a,r0924,c0020,}And 2 more, the same formula for the other cells it covers.
Other rules on C 17.01.a
- Number of events (new events) cannot be less than the sum of four rows (v5835_m)Warning
- Number of events subject to loss adjustments must equal the sum of its two parts (v5837_m)Warning
- Total event types cannot be less than the sum of seven columns (v5838_m)Warning
- Maximum single loss (under total business lines) must equal the largest of nine values (v5839_m)Warning
- Total event types cannot be less than the largest of seven values (v5840_m)Warning
- If the largest of seven values is more than zero, total event types cannot be less than the largest of seven values (v4863_m)Warning
- If a sum of seven columns is more than zero, total event types cannot be less than a sum of seven columns (v4861_m)Warning
- Corporate finance [CF]: maximum single loss cannot be more than sum of the five largest losses (v8716_m)Warning
Every COREP own funds rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.