The rule in plain words
Average value cannot be negative.
EBA checks it for seven rows: interest component, asset component, dividend component, other operating income, fee and commission income component, trading book component, and banking book component. That makes seven 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.
Average Value: Other operating income >= 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 C 16.02 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 - business indicator component (opr BIC) (C 16.02)
Rows
- 0010Interest component
- 0110Asset component
- 0200Dividend component
- 0220Other operating income
- 0310Fee and commission income component
- 0370Trading book component
- 0420Banking book component
Column
- 0070Average Value
A worked example
The first of its checks, with simple numbers.
Other operating income, average value must then be at least 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}.
{C_16.02,r0220,c0070,} >= 0The next five:
{C_16.02,r0370,c0070,} >= 0{C_16.02,r0310,c0070,} >= 0{C_16.02,r0420,c0070,} >= 0{C_16.02,r0110,c0070,} >= 0{C_16.02,r0200,c0070,} >= 0And 1 more, the same formula for the other cells it covers.
Other rules on C 16.02
- None of the 57 values it checks in operational risk can be negative (v903265_s)Warning
- A balancing check on operational risk (row 0110, v903112_m)Warning
- A balancing check on operational risk (row 0200, v90313_m)Warning
- A calculation check on operational risk (v90311_m)Warning
- Net profit or loss applicable to banking book must equal the sum of its five parts (v90310_m)Warning
- Net profit or loss applicable to trading book must equal the sum of its three parts (v90309_m)Warning
- Derivatives must equal trading and economic hedges plus hedge accounting (v90308_m)Warning
- Total assets must equal the sum of its five parts (v90307_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.