The rule in plain words
Number of events subject to loss adjustments must equal number of events with a positive loss adjustment plus number of events with a negative loss adjustment.
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.
EXECUTION, DELIVERY & PROCESS MANAGEMENT: Number of events subject to loss adjustments = of which: number of events with a positive loss adjustment + of which: number of events with a negative loss adjustment
What to do if your filing fails it
- 01Open the template below and find the cells the rule reads.
- 02Add up the parts in your file and compare the result with the total.
- 03If they differ, a part is missing, a value sits in the wrong cell, or the total is out of date.
- 04EBA allows a small rounding difference, worked out from the decimals each value is reported with.
- 05It runs only when your filing indicators mark C 17.01 as reported.
- 06This 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
- 0930Number of events subject to loss adjustments
- 0935of which: number of events with a positive loss adjustment
- 0936of which: number of events with a negative loss adjustment
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.
Number of events subject to loss adjustments must then be 2,000.
A file that reports 2,000 passes. One that reports 2,100 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,r0930,c0070,} = {C_17.01.a,r0935,c0070,} + {C_17.01.a,r0936,c0070,}The next five:
{C_17.01.a,r0930,c0040,} = {C_17.01.a,r0935,c0040,} + {C_17.01.a,r0936,c0040,}{C_17.01.a,r0930,c0060,} = {C_17.01.a,r0935,c0060,} + {C_17.01.a,r0936,c0060,}{C_17.01.a,r0930,c0010,} = {C_17.01.a,r0935,c0010,} + {C_17.01.a,r0936,c0010,}{C_17.01.a,r0930,c0020,} = {C_17.01.a,r0935,c0020,} + {C_17.01.a,r0936,c0020,}{C_17.01.a,r0930,c0050,} = {C_17.01.a,r0935,c0050,} + {C_17.01.a,r0936,c0050,}And 2 more, the same formula for the other cells it covers.
Other rules on C 17.01.a
- Gross loss amount (new events) cannot be less than the sum of four rows (v5836_m)Warning
- Total event types cannot be less than the sum of seven columns (v5838_m)Warning
- Number of events (new events) cannot be less than the sum of four rows (v5835_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.