The rule in plain words
This is the absolute value of the difference between interest income and interest expense
In each of "T-2" (column 0010), "T-1" (column 0020) and "T" (column 0030) of Operational risk: part 4 - business indicator and subcomponents (OPR) (OF16.00.01.04): "Absolute value of interest income minus interest expense" (row 0050) must equal the size of "Interest income" (row 0060) minus "Interest expense" (row 0090) (ignoring its sign).
This is a warning. It does not stop the return on its own, but your supervisor may ask you to explain it. It runs only when your filing indicators mark OF16.00.01.04 as reported.
The cells it reads
Operational risk: part 4 - business indicator and subcomponents (OPR) (OF16.00.01.04)
Rows
- R0050Absolute value of interest income minus interest expense
- R0060Interest income
- R0090Interest expense
Columns
- C0010T-2
- C0020T-1
- C0030T
Operational risk: part 4 - business indicator and subcomponents (OPR) (SC16.00.01.04)
Rows
- R0050Absolute value of interest income minus interest expense
- R0060Interest income
- R0090Interest expense
Columns
- C0010T-2
- C0020T-1
- C0030T
Which returns it applies to
Line4 Check runs it on the own funds (PRA001) and own funds for SDDTs (PRA116) returns on Bank of England banking taxonomy 4.1.1. The Bank of England applies it to own funds for SDDTs (PRA116) and own funds (PRA001) returns, as a warning.
The Bank’s own words and formula
The first paragraph of the plain words above is the Bank of England’s own, word for word, from its list of validations. The second spells out its formula, with each cell named from its templates.
Show the formulaShowHide
The Bank of England's formula. Cells are written as {t: table, r: row, c: column}.
{t: OF16.00.01.04, r: 0050} = abs({t: OF16.00.01.04, r: 0060} - {t: OF16.00.01.04, r: 0090})Where it applies, in the Bank's words (its scope):
scope({t: OF16.00.01.04, c:0010;0020;0030, f: banking, fv: banking_reporting})Other rules on Operational risk: part 4 - business indicator and subcomponents (OPR) (OF16.00.01.04)
- This is the Total Interest income calculated as the sum of Interest income and Income from Operating Leases (other than investment property) (boe_b0465)
- Operational risk: part 4 - business indicator and subcomponents (OPR): a total must equal the sum of its parts (boe_b0457)Blocking
- This is the Total value of Interest Earning Assets calculated as the sum of each interest earning asset for the period (boe_b0468)
- Total Interest expense is the sum of Interest Expense and Expense from Operating Leases (other than investment property) for the period (boe_b0472)
- This represents Total Other Operating Income (R0250), excluding Operating Leases other than investment property (R0270) (boe_b0476)
- Operational risk: part 4 - business indicator and subcomponents (OPR): a total must equal the sum of its parts (boe_b0479)
- Operational risk: part 4 - business indicator and subcomponents (OPR): a total must equal the sum of its parts (boe_b0510)
- Operational risk: part 4 - business indicator and subcomponents (OPR): values must agree (boe_b0794)
Every PRA banking rule on OF16.00.01.04
Checks like this one, run at the point of submission, are the first step to real-time supervision. Line4 builds SupTech software for financial regulators that runs checks like these as each return arrives.