What changed between the plenary report and the adopted text

Removed:‘Article 111 Exposure value

Removed:‘1. The exposure value of an asset item shall be its accounting value remaining after specific credit risk adjustments in accordance with Article 110, additional value adjustments in accordance with Article 34 related to the non-trading book business of the institution, amounts deducted in accordance with Article 36(1), point (m), and other own funds reductions related to the asset item have been applied.

Removed:2. The exposure value of an off-balance sheet item listed in Annex I shall be the following percentage of the item’s nominal value after the deduction of specific credit risk adjustments in accordance with Article 110 and amounts deducted in accordance with Article 36(1), point (m):

Removed:(a) 100 % for items in bucket 1;

Removed:(b) 50 % for items in bucket 2;

Removed:(c) 40 % for items in bucket 3;

Removed:(d) 20 % for items in bucket 4;

Removed:(e) 10 % for items in bucket 5.

Removed:3. The exposure value of a commitment on an off-balance sheet item as referred to in paragraph 2 shall be the lower of the following percentages of the commitment’s nominal value after the deduction of specific credit risk adjustments and amounts deducted in accordance with Article 36(1), point (m):

Removed:(a) the percentage referred to in paragraph 2 that is applicable to the item on which the commitment is made;

Removed:(b) the percentage referred to in paragraph 2 that is applicable to the type of commitment.

Removed:4. For contractual arrangements offered by an institution, but not yet accepted by the client, that would become commitments if accepted by the client, the percentage applicable shall be the one provided for in accordance with paragraph 2. For contractual arrangements that▌ meet the conditions specified in Article 5, point (9), second subparagraph, the percentage applicable shall be 0%.

Removed:5. Where an institution is using the Financial Collateral Comprehensive Method referred to in Article 223, the exposure value of securities or commodities sold, posted or lent under a repurchase transaction or under a securities or commodities lending or borrowing transaction, and of margin lending transactions shall be increased by the volatility adjustment appropriate to such securities or commodities in accordance with Articles 223 and 224.

Removed:6. The exposure value of a derivative instrument listed in Annex II shall be determined in accordance with Chapter 6, taking into account the effects of contracts of novation and other netting agreements as specified in that Chapter. The exposure value of repurchase transactions, securities or commodities lending or borrowing transactions, long settlement transactions and margin lending transactions may be determined in accordance with either Chapter 4 or Chapter 6.

Removed:7. Where the exposure is covered by a funded credit protection, the exposure value may be amended in accordance with Chapter 4.

Removed:8. EBA shall develop draft regulatory technical standards to specify:

Removed:(a) the criteria that institutions shall use to assign off-balance sheet items, with the exception of items already included in Annex I, to the buckets 1 to 5 referred to in Annex I;

Removed:(b) the factors that may constrain the institutions’ ability to cancel the unconditionally cancellable commitments referred to in Annex I;

Removed:(c) the process for notifying EBA about the institutions’ classification of other off-balance sheet items carrying similar risks as those referred to in Annex I.

Removed:EBA shall submit those draft regulatory technical standards to the Commission by [OP please insert the date = 1 year after the entry into force of this Regulation].

Removed:Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.’;

Removed:(35) in Article 112, points (i) and (k) are replaced by the following:

Removed:‘(i) exposures secured by mortgages on immovable property and ADC exposures;

Removed:(k) subordinated debt exposures;’;

Removed:(36) Article 113 is amended as follows :

Removed:(a) paragraph 1 is replaced by the following:

Removed:‘1. To calculate risk-weighted exposure amounts, risk weights shall be applied to all exposures, unless those exposures have been deducted from own funds, in accordance with Section 2, based on the exposure class to which those exposures are assigned and, to the extent specified in Section 2, based on the credit quality of those exposure. Credit quality may be determined by reference to the credit assessments of ECAIs or the credit assessments of export credit agencies in accordance with Section 3. With the exception of exposures assigned to the exposure classes laid down in Article 112, point (a), (b), (c) and (e), where the assessment in accordance with Article 79, point (b) of Directive 2013/36/EU reflects higher risk characteristics than those implied by the credit assessment of the nominated ECAI or export credit agency, the institution shall assign a risk weight at least one credit quality step higher than the risk weight implied by the credit assessment of the nominated ECAI or export credit agency.’;

Removed:(b) paragraph 3 is replaced by the following:

Removed:‘3. Where an exposure is subject to credit protection, the exposure value or the applicable risk weight to that exposure, as appropriate, may be amended in accordance with this Chapter and Chapter 4.’;

Removed:(36a) Article 115(3) is replaced by the following:

Removed:‘3. Where an exposure is subject to credit protection, the exposure value or the applicable risk weight to that exposure, as appropriate, may be amended in accordance with this Chapter and Chapter 4.

Removed:Exposures to churches or religious communities constituted in the form of a legal person under public law shall, in so far as they raise taxes in accordance with legislation conferring on them the right to do so, be treated as exposures to regional governments and local authorities. In this case, paragraph 2 shall not apply.’;

Removed:(36b) in Article 116(4), the following subparagraph is added:

Removed:‘EBA shall maintain a publicly available database of all public-sector entities within the Union which relevant competent authorities consider as having no difference in risk as exposures to the central government, regional government or local authority in whose jurisdiction the public-sector entity is established.’;

Removed:(37) in Article 119, paragraphs 2 and 3 are deleted;

Removed:(38) in Article 120, paragraphs 1 and 2 are replaced by the following:

Removed:‘1. Exposures for which a credit assessment by a nominated ECAI is available shall be assigned a risk weight in accordance with Table 3 which corresponds to the credit assessment of the ECAI in accordance with Article 136.

Removed:Table 3

Removed:2. Exposures with an original maturity of three months or less for which a credit assessment by a nominated ECAI is available and exposures which arise from the movement of goods across national borders with an original maturity of six months or less and for which a credit assessment by a nominated ECAI is available, shall be assigned a risk weight in accordance with Table 4 which corresponds to the credit assessment of the ECAI in accordance with Article 136.

Removed:Table 4

Removed:(39) Article 121 is replaced by the following:

Removed:‘Article 121 Exposures to unrated institutions

Removed:1. Exposures to institutions for which a credit assessment by a nominated ECAI is not available shall be assigned to one of the following grades:

Removed:(a) where all of the following conditions are met, exposures to institutions shall be assigned to Grade A:

Removed:(i) the institution has adequate capacity to meet its financial commitments, including repayments of principal and interest, in a timely manner, for the projected life of the assets or exposures and irrespective of the economic cycles and business conditions;

Removed:(ii) the institution meets or exceeds the requirement laid down in Article 92(1), the specific own funds requirements referred to in Article 104a of Directive 2013/36/EU, the combined buffer requirement defined in Article 128, point (6), of Directive 2013/36/EU and any equivalent or additional local supervisory or regulatory requirements in third countries, insofar as those requirements are published and are to be met by Common Equity Tier 1 capital, Tier 1 capital or own funds;

Removed:(iii) information about the requirements referred to in point (ii) is publicly disclosed or otherwise made available;

Removed:(iv) the assessment in accordance with Article 79 of Directive 2013/36/EU has not revealed that the institution does not meet the conditions set out in points (i) and (ii);

Removed:(b) where all of the following conditions are met and at least one of the conditions in point (a) is not met, exposures to institutions shall be assigned to Grade B:

Removed:(i) the institution is subject to substantial credit risk, including repayment capacities that are dependent on stable or favorable economic or business conditions;

Removed:(ii) the institution meets or exceeds the requirement laid down in Article 92(1), the requirements referred to in Articles 458(2), point (d)(i), and Article 459, point (a), the specific own funds requirements referred to in Article 104a of Directive 2013/36/EU or any equivalent or additional local supervisory or regulatory requirements in third countries insofar as those requirements are published and are to be met by Common Equity Tier 1 capital, Tier 1 capital and own funds;

Removed:(iii) information about the requirements referred to in point (ii) is publicly disclosed or otherwise made available;

Removed:(iv) the assessment performed in accordance with Article 79 of Directive 2013/36/EU has not revealed that the institution does not meet the conditions set out in points (i) and (ii).

Removed:For the purposes of point (ii), equivalent or additional local supervisory or regulatory requirements shall not include capital buffers equivalent to those defined in Article 128 of Directive 2013/36/EU.

Removed:(c) where the conditions for assignment to Grade A or Grade B are not met, or where any of the following conditions is met, exposures to institutions shall be assigned to Grade C:

Removed:(i) the institution has material default risks and limited margins of safety;

Removed:(ii) adverse business, financial, or economic conditions are very likely to lead, or have led, to the institution’s inability to meet its financial commitments;

Removed:(iii) where audited financial statements are required by law for the institution, the external auditor has issued an adverse audit opinion or has expressed substantial doubt in its financial statements or audited reports within the previous 12 months about the institution’s ability to continue as a going concern institution.

Removed:1a. For exposures to financial institutions treated as exposures to institutions in accordance with Article 119(5), for the purpose of assessing whether the conditions set out in paragraph 1, points (a)(ii) and (b)(ii), of this Article are met by those financial institutions, institutions shall assess whether those financial institutions meet or exceed any comparable prudential requirements.

Removed:2. Exposures assigned to Grade A, B or C in accordance with paragraph 1 shall be assigned a risk weight as follows: