Communication NBB_2020_39 concerning the temporary exclusion of certain exposures on central banks from the total exposure measure of the leverage ratio, in view of the COVID-19 pandemic

NBB_2020_39 – 09 October 2020 Communication – Page 1/3 boulevard de Berlaimont 14 – BE-1000 Brussels tel. +32 2 221 30 17 company number: 0203.201.340 RPM Brussels www.bnb.be

Communication
Brussels, 09 October 2020
Reference: NBB_2020_39 your contact:
Guy Van Den Eynde tel. +32 2 221 57 54
Guy.VanDenEynde@nbb.be

Communication concerning the temporary exclusion of certain exposures on central banks from the total exposure measure of the leverage ratio, in view of the COVID-19 pandemic

Scope
Belgian mixed financial companies and credit institutions not subject to the direct supervision of the European Central Bank1

Summary/Objectives
In light of the coronavirus (COVID-19) crisis, this communication contains a public statement by the National Bank of Belgium that exceptional circumstances exist justifying the exclusion from the total exposure measure (of the leverage ratio) of the exposures listed in Article 500ter, paragraph 1, points a) and b), of Regulation (EU) No 575/20132 on central banks. This communication also clarifies which exposures on central banks fall under this exclusion option.

1 The list of institutions subject to the direct prudential supervision of the ECB is available at the following internet address: https://www.bankingsupervision.europa.eu/banking/list/who/html/index.en.html.
2 Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012.

Communication – Page 2/3 NBB_2020_39 – 09 October 2020

Dear Sir, Dear Madam,

Regulation (EU) 2020/873 (the “CRR Quick Fix”3) added a new article (500ter) to Regulation (EU) No 575/2013. This article allows an institution to exclude, until 27 June 2021 inclusive, certain exposures on central banks from the measure of its total exposure (the denominator of the leverage ratio) when the competent authority of the institution has established, after consulting the relevant central bank, and publicly declared that exceptional circumstances exist justifying the exclusion in order to facilitate the implementation of monetary policies.

Following the determination of the existence of exceptional circumstances by the European Central Bank in Article 2, paragraph 1, of Decision (EU) 2020/1306 of the European Central Bank of 16 September 2020 concerning the temporary exclusion of certain exposures on central banks from the total exposure measure in view of the COVID-19 pandemic (ECB/2020/44) (cf. Annex 1), the National Bank of Belgium has decided that:

• for the purposes of Article 500ter, paragraph 2, of Regulation (EU) No 575/2013, exceptional circumstances exist justifying the exclusion from the total exposure measure of the exposures on central banks listed in Article 500ter, paragraph 1, points a) and b), of that Regulation in order to facilitate the implementation of monetary policies;

• regarding the exposures listed in Article 500ter, paragraph 1, point b), of Regulation (EU) No 575/2013, this determination of exceptional circumstances applies exclusively to exposures on central banks of the Eurosystem related to deposits made under the deposit facility or balances held on reserve accounts, including funds held to meet mandatory reserve requirements. The following definitions apply. By:

o “Eurosystem”: the Eurosystem within the meaning of Direction (EU) 2015/510 of the European Central Bank (ECB/2014/60); o “deposit facility”: a deposit facility within the meaning of Direction (EU) 2015/510 (ECB/2014/60); o “reserve account”: a reserve account within the meaning of Regulation (EC) No 1745/2003 of the European Central Bank (ECB/2003/9); o “mandatory reserve requirements”: the mandatory reserve requirements calculated in accordance with Regulation (EC) No 1745/2003 (ECB/2003/9).

This communication enters into force on 9 October 2020. From this date, institutions may therefore exclude from the total exposure measure the exposures specified above on central banks pursuant to Article 500ter, paragraph 1, point b), of Regulation (EU) No 575/2013, until 27 June 2021 inclusive.

Exposures representing claims on the central bank that are not related to the implementation of monetary policy cannot be excluded from the total exposure measure.

A copy of this communication is sent to the auditor(s) of your institution.

Please accept, Sir, Madam, the assurance of my distinguished consideration.

Pierre Wunsch
Governor

3 Regulation (EU) 2020/873 of the European Parliament and of the Council of 24 June 2020 amending Regulations (EU) No 575/2013 and (EU) 2019/876 as regards certain adjustments to be made in response to the COVID-19 pandemic.

NBB_2020_39 – 09 October 2020 Communication – Page 3/3
Annex (available only at www.bnb.be):
Decision (EU) 2020/1306 of the European Central Bank of 16 September 2020 concerning the temporary exclusion of certain exposures on central banks from the total exposure measure in view of the COVID-19 pandemic (ECB/2020/44)