Question
Why there is still some validation rules which control if Financial Garantee and Collateral are less than the Gross Carrying Amount in FINREP 18.02?
Background on the question
There is several validation rules which obliged us to declare Financial Garantee and Collateral less than the Gross Carrying Amount in FIN 18.02. There is multiple business cases where we can have Financial garantee and collateral more than gross carrying amount. And no regulatory text which support this validation rules.
Answer
This question has been rejected because the issue it deals with is already explained or addressed in Annex V, Part 2, paragraph 239xi of Commission Implementing Regulation (EU) 2021/451 of 17 December 2020 where it is stated that: 'Information on collateral received and financial guarantees received on loans shall be reported in accordance with paragraph 239 of this Part. Consequently, the sum of the amounts reported for both collateral and guarantees shall be capped at the carrying amount of the related exposure'.For further information on the purpose of this tool and on how to submit questions, please see 'Additional background and guidance for asking questions'.