The rule in plain words
Non-financial corporations cannot be more than total.
EBA checks it for two rows: net cumulated recoveries from litigation procedures concluded during the period and gross carrying amount reduction from litigation procedures concluded during the period. That makes two 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.
Net cumulated recoveries from litigation procedures concluded during the period, of which: Non-financial corporations <= Net cumulated recoveries from litigation procedures concluded during the period, TOTAL
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 47.00 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
Loans and advances: average duration and recovery periods (F 47.00)
Rows
- 0020Net cumulated recoveries from litigation procedures concluded during the period
- 0030Gross carrying amount reduction from litigation procedures concluded during the period
Columns
- 0010TOTAL
- 0040of which: Non-financial corporations
A worked example
The first of its checks, with simple numbers.
Total 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_47.00,r0020,c0040,} <= {F_47.00,r0020,c0010,}The next one:
{F_47.00,r0030,c0040,} <= {F_47.00,r0030,c0010,}Other rules on F 47.00
- Loans collateralised by residential immovable property cannot be more than households (v8109_m)Warning
- SMEs cannot be more than non-financial corporations (v8111_m)Warning
- Households cannot be more than total (v8108_m)Warning
- Commercial Real Estate (CRE) loans cannot be more than SMEs (v8112_m)Warning
- Commercial Real Estate (CRE) loans to NFCs other than SMEs cannot be more than non-financial corporations (v8113_m)Warning
- None of the 28 values it checks in loans and advances can be negative (v8365_s)Warning
- The absolute value of non-financial corporations cannot be less than the absolute value of SMEs (v23576_h)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.