The rule in plain words
Each of the values it checks in breakdown of financial assets cannot be more than zero.
EBA checks it for five columns: assets without significant increase in credit risk since initial recognition (Stage 1), assets with significant increase in credit risk since initial recognition but not credit-impaired (Stage 2), credit-impaired assets (Stage 3), accumulated partial write-offs and accumulated total write-offs. And for 15 rows, from debt securities (0010) to financial assets at amortised cost (0140). 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.
Credit-impaired assets (Stage 3): General governments <= 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 04.04.1 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
Breakdown of financial assets by instrument and by counterparty sector: financial assets at amortised cost (F 04.04.1)
Rows
- 0010Debt securities
- 0020Central banks
- 0030General governments
- 0040Credit institutions
- 0050Other financial corporations
- 0060Non-financial corporations
- 0070Loans and advances
- 0080Central banks
- 0090General governments
- 0100Credit institutions
- 0110Other financial corporations
- 0120Non-financial corporations
- 0125Of which: Small and Medium-sized Enterprises
- 0130Households
- 0140FINANCIAL ASSETS AT AMORTISED COST
Columns
- 0050Assets without significant increase in credit risk since initial recognition (Stage 1)
- 0060Assets with significant increase in credit risk since initial recognition but not credit-impaired (Stage 2)
- 0070Credit-impaired assets (Stage 3)
- 0080Accumulated partial write-offs
- 0090Accumulated total write-offs
A worked example
The first of its checks, with simple numbers.
General governments, credit-impaired assets (Stage 3) can then be at most 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_04.04.1,r0090,c0070,} <= 0The next five:
{F_04.04.1,r0050,c0050,} <= 0{F_04.04.1,r0040,c0080,} <= 0{F_04.04.1,r0020,c0060,} <= 0{F_04.04.1,r0080,c0070,} <= 0{F_04.04.1,r0130,c0070,} <= 0And 69 more, the same formula for the other cells it covers.
Other rules on F 04.04.1
- Debt instruments at cost or at amortised cost: a balancing check across information on performing and non-performing exposures, and breakdown of financial assets (F 18.00.b, v8142_m)Warning
- Gross carrying amount: financial assets at amortised cost, credit-impaired assets (Stage 3) must equal the sum of its two parts (v8141_m)Warning
- Small and medium-sized Enterprises, gross carrying amount or nominal amount must equal the sum of its four parts (row 0130, v8140_m)Warning
- Accumulated impairment: financial assets at amortised cost, credit-impaired assets (Stage 3) must equal the sum of its two parts (v7844_m)Warning
- Accumulated impairment: financial assets at amortised cost, assets with significant increase in credit risk since initial recognition but not credit-impaired (Stage 2) must equal the sum of its four parts (v7843_m)Warning
- Small and medium-sized Enterprises, accumulated impairment, accumulated negative changes in fair value due to credit risk and provisions must equal the sum of its four parts (row 0130, v7842_m)Warning
- Loans and advances, gross carrying amount or nominal amount plus debt securities, gross carrying amount or nominal amount must equal the sum of four columns (v7815_m)Warning
- Gross carrying amount: financial assets at amortised cost, assets with significant increase in credit risk since initial recognition but not credit-impaired (Stage 2) must equal the sum of its four parts (v7814_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.