The rule in plain words
Defaulted gross carrying amount cannot be more than non-performing gross carrying amount.
EBA checks it for 18 rows, from cash balances at central banks and other demand deposits (0075) to credit for consumption (0240). That makes 18 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.
Other financial corporations, Of which: defaulted <= Other financial corporations, Of which: non-performing
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 bigger 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 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
- 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
- 0025Of which: non-performing
- 0026Of which: defaulted
A worked example
The first of its checks, with simple numbers.
Non-performing gross carrying amount must then be at least 1,200.
A file that reports 1,200 passes. One that reports 1,100 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}.
{F_20.04,r0120,c0026,} <= {F_20.04,r0120,c0025,}The next five:
{F_20.04,r0090,c0026,} <= {F_20.04,r0090,c0025,}{F_20.04,r0100,c0026,} <= {F_20.04,r0100,c0025,}{F_20.04,r0140,c0026,} <= {F_20.04,r0140,c0025,}{F_20.04,r0170,c0026,} <= {F_20.04,r0170,c0025,}{F_20.04,r0230,c0026,} <= {F_20.04,r0230,c0025,}And 12 more, the same formula for the other cells it covers.
Other rules on F 20.04
- Accumulated impairment cannot be more than zero (v09608_s)Warning
- Accumulated negative changes in fair value due to credit risk on non-performing exposures cannot be more than zero (v5698_s)Warning
- None of the 75 values it checks in geographical breakdown of assets can be negative (v5697_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
- 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
Every FINREP 9 rule, by template
Checks like this one, run at the point of submission, are the first step to real-time supervision.