Question
How should financial guarantees be reported in F09.02 if the value of the guarantee exceeds the loan exposure (possible overcollateralization)? Example: There is a credit risk mitigation group including 2 financial guarantees and 1 loan exposure as follows: Financial guarantee nr.1 - 15 000 EUR Financial guarantee nr.2 - 17 000 EUR Loan exposure - 14 000 EUR Reported amount in F09.02 col0010 = ?
Background on the question
Based on FINREP Annex V, Part 2.119: "For financial guarantees received, the ‘maximum amount of the guarantee that can be considered’ shall be the maximum amount the counterparty would have to pay if the guarantee is called on"
Answer
This question has been rejected because the issue it deals with is already explained in Annex V, Part 2, paragraph 119 to Commission Implementing Regulation (EU) 2021/451. Furthermore, the validation rule v1073_m applies.For further information on the purpose of this tool and on how to submit questions, please see 'Additional background and guidance for asking questions'.