EU Capital Requirements Regulation (Regulation (EU) No 575/2013)
Part Four: Large exposures – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)

EU Capital Requirements Regulation (Regulation (EU) No 575/2013) 395-396: Keep each exposure within 25 % of Tier 1 (with the EUR 150 million rule for institutions) and report and cure any breach

What does 395-396 require?

An exposure to a client or group, after credit risk mitigation, may not exceed 25 % of Tier 1 capital; for institutions and investment firms the limit is the higher of 25 % and EUR 150 million (subject to a self-set reasonable limit not above 100 % of Tier 1 and to the non-institution part staying within 25 %), and a G-SII's exposure to another G-SII may not exceed 15 %. An exceptional breach must be reported without delay; the authority may allow limited time to comply, and where the breach lasts beyond three months the institution must present and carry out a plan for timely return to compliance. Exemptions (for example sovereign and intragroup exposures) and eligible mitigation follow Articles 399 to 403.

Maintained by Gerard Blokdyk

Other controls in Part Four: Large exposures – EU Capital Requirements Regulation (Regulation (EU) No 575/2013)

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