Question
The definition of what is a non-material loss is not defined within Article 472 of Regulation (EU) No 575/2013 (CRR); is it possible to clarify what ‘material’ / 'non-material' is? Can you advise how- if applicable- such non-material losses are treated?
Background on the question
Article 472 (‘Items not deducted from CET1’) refers to both residual amounts of current year losses that are material and which are deducted from CET1, and those that are not material and which are not deducted. It is unclear how 'material' is defined in this context, and furthermore it is not clear whether those non-material losses which are not deducted from common equity tier 1 warrant further treatment elsewhere.
Answer
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