List of Options and National Discretions

The following list shows the options and national discretions contained in Directive 2006/48/EC and Directive 2006/49/EC and their exercise in Belgian legislation. The options and discretions can be summarised under the following topics:

Area Dir. 2006/48 (unless indicated 2006/49) Denomination Description Application
OWN FUNDS Article 57 (second last §) Inclusion of interim profits Member States may permit the inclusion of interim profits before a formal decision has been taken on the accounts, subject to conditions. A (on a consolidated basis)
OWN FUNDS Article 58 Waiver on certain deductions Shares in another credit institution, financial institution, insurance or reinsurance undertaking may not be deducted if held temporarily for the purposes of a financial assistance operation designed to reorganise and save the entity. A
OWN FUNDS Article 59 Alternatives to deductions As an alternative to deductions of participations and capital instruments held in other financial institutions, credit institutions may be allowed to apply, with the necessary changes, any of the methodologies set out in Annex 1 to the Conglomerates Directive. A
OWN FUNDS Article 60 Deductions for stand-alone requirements purposes For the purposes of the calculation of their stand alone requirments, institutions may be not required to deduct holdings and participations in insitutions included in the scope of their consolidation. A (partially, if not deducted, participations are risk weighted at 400%)
OWN FUNDS Articles 61, 63.1, 64.3 and 65 List of own funds The list of own funds elements in the Directive is a maximum, both in items and amounts. Member States may choose not to admit certain elements or to applied lower ceilings. They can add further deductions. Member states may choose to accept other elements of own funds different from those in article 57, subject to conditions. Finally they can decide on the possible inclusion of cumulative preferential shares and subordinated loan capital and on the inclusion of certain elements normally accounted for as assets, when they bear a credit ('negative') sign. A
OWN FUNDS Article 13.2
Dir. 2006/49/EC		 Alternative form of calculation for investment firms not providing certain services and applying Article 21 Investment firms that, in view of the services they provide, are allowed to calculate their own funds as a percentage of the turnover of the previous year (Article 21), may be also authorised to apply a definition of own funds other than that prescribed by directive 2006/48/EC. A (partially)
OWN FUNDS Article 13.5
Dir. 2006/49/EC		 Flexibility in the composition of own funds for investment firms makig use of the option in Article 13.2 If an institution is calculating its own funds in accordance with the alternative offered in Article 13.2 of directive 2006/49/EC, it can be allowed to substitute subordinated loans by other elements described in Article 57 of directive 2006/48/EC, mainly as Tier 2. A
OWN FUNDS Article 14
Dir. 2006/49/EC		 Excess of subordinated capital The Competent Authorities may allow investment firms to hold subordinated capital in excess of ordinary thresholds, up to certain limits. A
SCOPE OF APPLICATION Article 69.1 Individual waiver for subsidiaries Member States may grant individual institutions which are subsidiaries within a group, subject to the fulfilment of certain conditions, an exemption from individual requirements. The same applies where the parent company is a financial holding company. A
SCOPE OF APPLICATION Article 69.3 Individual waiver for parent credit institutions Member States may grant individual institutions which are the parent company within a group, subject to the fulfilment of certain conditions, an exemption from individual requirements. NA
SCOPE OF APPLICATION Article 70 Solo consolidation Member States may allow, on a case-by-case basis, for the purpose of the calculation of the individual requirements of the parent institution, and subject to certain conditions, the incorporation of subsidiaries whose material exposures or liabilites are all to that parent institution. A
SCOPE OF APPLICATION Article 72.3 Exemption from Pillar III The Competent Authorities may decide to exempt, fully or partially, a credit institution from Pillar III requirements provided such institution is included within a group complying with comparable disclosures on a consolidated basis in a third country. A
SCOPE OF APPLICATION Article 73.1 Exemption from consolidation Member States may decide that, if certain conditions are met, some subsidiaries need not be included in consolidation. A
SCOPE OF APPLICATION Articles 22, 24 & 25 Dir. 2006/49/EC Consolidated waiver for investment firms A group of investment firms may be exempted from consolidated capital requirements, on a case-by-case basis, provided conditions are met. A (articles 22 & 25) NA (article 25)
COUNTERPARTY RISK IN DERIVATIVES AND OTHER EXPOSURES Annex III, Part 3 Alternative template for the calculation of potential future value in certain cases For institutions complying with certain requiremtents in their trading activities in commodities, gold and other products, Member States may allow percentages for the calculation of potential future value other than the general ones NA
COUNTERPARTY RISK IN DERIVATIVES AND OTHER EXPOSURES Annex III, Part 6, Para. 7 Higher value of coeficient Alpha (multiplier to calculate the exposure value of certain contracts) Member States may set a value for coefficient Alpha higher than 1.4. A
COUNTERPARTY RISK IN DERIVATIVES AND OTHER EXPOSURES Annex III, Part 6, Para. 12 Internal determination of the value of coeficient Alpha (multiplier to calculate the exposure value of certain contracts) Member States may allow institutions to calculate Alpha internally, subject to a floor of 1.2. A
COUNTERPARTY RISK IN DERIVATIVES AND OTHER EXPOSURES Annex III, Part 7c (ii) Calculation (separate/aggregate) of 'net-to-gross ratio' At the discretion of Competent Authorities, credit institutions may use either separate calculation or aggregate calculation when calculating the 'net-to-gross ratio'. If Member States permit credit institutions a choice of methods, the method chosen is to be used consistently. NA
STANDARDISED APPROACH Article 80.3 & Annex VI, Part 1, Para. 24 Risk-weighting exposures to credit institutions Member States may choose between two alternative methods for risk-weighting exposures to credit institutions: (a) on the basis of the risk-weight of the corresponding central government and (b) on the basis of the credit assessment of the institution itself. Option (b)
STANDARDISED APPROACH Article 80.7 Exemption of intra-group exposures from risk-weighted exposures If certain conditions are met, the Competent Authorities may assign a 0% risk-weight on exposures not forming part of "own funds" of a credit institution to its parent undertaking, its subsidiary, a subsidiary of its parent undertaking or an undertaking linked by a relationship within the meaning of Article 12.1 of Directive 83/349/EEC. A
STANDARDISED APPROACH Article 80.8 Treatment of exposures to a counter-party which is member of the same institutional protection scheme. If certain conditions are met, the Competent Authorities may assign a 0% risk weight on exposures not forming part of "own funds" to counterparties which are members of the same institutional protection scheme as the ending institution. A
STANDARDISED APPROACH Article 83.2 Permission to use unsolicited ratings In order to use unsolicited ratings, credit institutions must get permission from the Competent Authorities. To make this possible, that alternative should be incorporated to legislation (implicit discretion). A
STANDARDISED APPROACH Annex VI, Part 1, Para. 5 Recognition of a third country's treatment of central government and central bank exposures When a third country with supervisory/regulatory arrangements at least equivalent to those in the Community, assigns for the exposures to its own central government and central bank denominated and funded in the domestic currency a lower risk weight than the one applicable in principle, a Member State may allow the risk-weight of such exposures in the same manner. A
STANDARDISED APPROACH Annex VI, Part 1, Para. 11 Recognition of a third country's treatment of regional governments and local authorities When a third country with supervisory/regulatory arrangements at least equivalent to those in the Community treats exposures to regional government and local authorities as exposures to its central government, a Member State may allow the risk-weight of such exposures in the same manner. A
STANDARDISED APPROACH Annex VI, Part 1, Para. 14 Treatment of public sector entities as institutions Exposures to public sector entities may be treated as exposures to credit institutions, without applying the preferential weights applicable to short term exposures to institutions. A
STANDARDISED APPROACH Annex VI, Part 1, Para. 15 Treatment of exposures to public sector entities guaranteed by central governments The Competent Authorities may, in exceptional cases, treat exposures to public sector entities as exposures to the central goverment in whose jurisdiction they are established where, in their opinion, there is no difference in the risk between such exposures because of the existence of an appropriate guarantee from the central government. A
STANDARDISED APPROACH Annex VI, Part 1, Para. 17 Recognition of a third country's treatment of public sector entities When a third country with supervisory/regulatory arrangements at least equivalent to those applied in the Community treats exposures to its public sector entities as exposures to institutions, a Member State may allow the risk-weight of exposures to such public sector entities in the same manner. A
STANDARDISED APPROACH Annex VI, Part 1, Para. 37 Treatment of short term exposures to EU institutions in their national currency A Competent Authority may allow short term exposures to Member States' institutions denominated and funded in the national currency a risk weight that is one category less favourable than the preferential risk weight applicable on exposures to EU central governments. NA
STANDARDISED APPROACH Annex VI, Part 1, Para. 40 Treatment of exposures in the form of minimum reserves held by an intermediary credit institution. Provided that certain conditions are met, a Member State may permit exposures in the form of minimum reserves required by the ECB or by the central bank of a Member State to be held by a credit institution, in accordance with the relevant ECB regulation on the application of minimum reserves, to be risk weighted as exposures to the central bank of the Member State concerned. A
STANDARDISED APPROACH Annex VI, Part 1, Para. 49 Treatment of exposures secured by mortgages on residential property- conditional waiver of a criterion Competent authorities may dispense with the condition contained in point 48(b) for exposures fully and completely secured by mortgages on residential property which is situated within their territory, if they have evidence that a well-developed and long-established residential real estate market is present in their territory with loss rates which are sufficiently low to justify such treatment A
STANDARDISED APPROACH Annex VI, Part 1, Para. 51 Risk-weighting exposures secured by mortgages on commercial real estate Subject to the discretion of the competent authorities, exposures or any part of an exposure fully and completely secured, to the satisfaction of the competent authorities, by mortgages on offices or other commercial premises situated within their territory may be assigned a risk weight of 50%

A
STANDARDISED APPROACH Annex VI, Part 1, Para. 52 Risk-weighting exposures secured by shares in Finnish housing companies Subject to the discretion of the competent authorities, exposures fully and completely secured, to the satisfaction of the competent authorities, by shares in Finnish housing companies, operating in accordance with the Finnish Housing Company Act of 1991 or subsequent equivalent legislation, in respect of offices or other commercial premises may be assigned a risk weight of 50% A
STANDARDISED APPROACH Annex VI, Part 1, Para. 53 Risk-weighting eligible property leasing transactions Subject to the discretion of the competent authorities, exposures related to property leasing transactions concerning offices or other commercial premises situated in their territories under which the credit institution is the lessor and the tenant has an option to purchase may be assigned a risk weight of 50% provided that the exposure of the credit institution is fully and completely secured to the satisfaction of the competent authorities by its ownership of the property A
STANDARDISED APPROACH Annex VI, Part 1, Para. 58 Treatment of exposures secured by mortgages on commercial real estate - conditional waiver of a criterion Competent authorities may dispense with the condition contained in point 54(b) for exposures fully and completely secured by mortgages on commercial property which is situated within their territory, if they have evidence that a well-developed and long-established commercial real estate market is present in their territory with loss-rates which do not exceed the following limits (…) A
STANDARDISED APPROACH Annex VI, Part 1, Para. 63 Risk-weighting past due exposures secured by non eligible collateral A risk weight of 100% may be assigned on past due exposures which are fully secured by non eligible collateral when value adjustments reach 15% of the exposure gross of the value adjustments, if strict operational criteria exist to ensure the good quality of the collateral. NA
STANDARDISED APPROACH Annex VI, Part 1, Para. 64 Risk-weighting of past due exposures secured by mortgages on residential property The applicable risk weight on past due exposures secured by mortgages on residential property net of value adjustments may be reduced to 50%, if value adjustments are no less than 20% of the exposure amount gross of the value adjustments. A
STANDARDISED APPROACH Annex VI, Part 1, Para. 66 Risk-weighting items belonging to regulatory high risk categories The Competent Authorities have the discretion to assign a risk weight of 150% on exposures associated with particularly high risks. A
STANDARDISED APPROACH Annex VI, Part 1, Para. 67 Regulatory high risk categories - lower risk weight due to value adjustments The risk weight on non past due exposures receiving a 150% risk weight may be reduced to (a) 100% if value adjustments exist which are no less than 20% of the gross exposure and (b) 50% if value adjustments are no less than 50% of the gross exposure. A
STANDARDISED APPROACH Annex VI, Part 1, Para. 68(e) Loans secured by commercial real estate as collateral for covered bonds The Competent Authorities may recognise loans secured by commercial real estate as eligible collateral for covered bonds where the required loan to value ratio of 60% is exceeded up to a maximum level of 70%, if certain defined criteria and conditions are met.

NA
STANDARDISED APPROACH Annex VI, Part 1, Para. 85 Risk-weighting institutions specialising in the inter-bank and public debt market Member States may allow a risk weight of 10% for exposures to institutions specialising in the interbank and public debt markets in their home member states, if such institutions are subject to close supervision and the exposures are adequately secured. NA
STANDARDISED APPROACH Annex VI, Part 3, Para. 17 Exceptions to the non-use of domestic currency ratings for foreign-currency exposures The Competent Authorities may allow the domestic currency rating of an obligor to be used for its foreign currency exposures provided such exposures arise from institutions' participation in a loan extended by a Multilateral Development Bank. A
IRB Article 84.2 Requirements for IRB standards for parent and EU subsidiaries altogether When IRB approach is used by an EU parent or financial hoding company and its subsidiaries, Member States may allow the minimum requirements to qualify for IRB to be met by parent and subsidiaries considered together. A
IRB Annex VII, Part 1, Para. 6 Lower rate for specialized lending The Competent Authorities may authorise a credit institution to generaly assign a 50% risk weight to SL-Category 1 and 70% to SL-Category 2 (regardless of maturity) if certain conditions are met. A
IRB Annex VII, Part 1, Para. 13 (last sentence) Special treatment for revolving retail exposures secured by a link to a wage account The requirement that retail revolving exposures be unsecured (Annex VII, Part 1, Para. 13 b)) may be waived by the Competent Authorities in respect of collateralised credit facilities linked to a wage account. A
IRB Annex VII, Part 1, Para. 18 Treatment of ancillary banking services Exposures to ancillary banking services undertakings (equity) can be treated as non-credit obligation assets. A
IRB Annex VII, Part 2, Para. 5, 7 & Annex VIII, Part 1, Para. 26 Possibility to extend the list of unfunded protection providers for the purposes of recognition of unfunded credit protection in PD For the purposes of the recognition of unfunded credit protection in PD by institutions, the Competent Authorities may extend the list of unfunded credit protection providers further than those included in Annex VIII, Part 1, Para. 26. A
IRB Annex VII, Part 2, Para. 12 & 13 Alternatives for the calculation of maturity The Competent Authorities may require all institutions in their jurisdiction to use maturity (M) for each exposure in accordance with formulae instead of using values by default (0.5 years for repos and 2.5 for other exposures). A
IRB Annex VII, Part 2, Para. 15 Maturity for EU-firms (< EUR 500 mio.) The Competent Authorities may allow maturity of exposures to European corporates with consolidated assets of less than EUR 500 million to be set at values by default, even if they apply the formulae option. NA
IRB Annex VII, Part 2, Para. 15 (last sentence) Maturity for EU-firms investing primarily in real estate (< EUR 1,000 mio.) The Competent Authorities may allow maturity of exposures to European corporates that invest primarily in real estate with consolidated assets of less than EUR 1,000 million to be set at values by default, even if they apply the formulae option. NA
IRB Annex VII, Part 2, Para. 20 & Annex VIII, Part 1, Para. 26 Possibility to extend the list of unfunded protection providers for the purposes of calculation of dillution risk For the purposes of the calculation of dillution risk, the Competent Authorities may extend the list of unfunded credit protection providers further than those included in Annex VIII, Part 1, Para. 26. A
IRB Annex VII, Part 4, Para. 44, last sentence Definition of threshold for the exposure past due In all cases, the exposure past due shall be above the threshold defined by the competent authorities and which reflects a reasonable level of risk A
IRB Annex VII, Part 4, Para. 48, 1st and 2nd sentence Definition of default for retail and PSE For retail and PSE exposures, the competent authorities of each Member State shall set the exact number of days past due that all credit institutions in its jurisdiction shall abide by under the definition of defaults set out in §44, for exposures to such counterparts situated within this Member State. The specific number shall fall within 90-180 days and may differ across product lines. A
IRB Annex VII, Part 4, Para 56 Flexibility in data collection The Competent Authorities may apply less stringence as regards the data needed for estimation and collected before the implementation of the directive, provided the credit institution makes appropriate adjustments. A
CREDIT RISK MITIGATION Annex VIII, Part 1, Para. 15 Recognition of shares in Finnish housing companies as eligible collateral The Competent Authorities may authorise their credit institutions to recognise as eligible collateral shares in Finnish housing companies that are operating in accordance with the Finnish Housing Company Act of 1991 provided that certain conditions are met. A
CREDIT RISK MITIGATION Annex VIII, Part 1, Para. 16, 1st sentence Residential real estate property waiver The competent authorities may waive the requirement for their credit institutions to comply with condition (b) in point 13 for exposures secured by residential real estate property situated within the territory of that Member State if the competent authority have evidence that (...). A
CREDIT RISK MITIGATION Annex VIII, Part 1, Para. 17 Commercial real estate property waiver The competent authorities of the Member States may waive the requirement for their credit institutions to comply with the condition in point 13(b) for commercial real estate property situated within the territory of that Member State, if the competent authorities have evidence that the relevant market is well-developed and long-established and that loss-rates stemming from lending secured by commercial real estate property satisfy the following conditions (…) A
CREDIT RISK MITIGATION Annex VIII, Part 1, Para. 20 Amounts receivable as eligible collateral The Competent Authorities may recognise as eligible collateral amounts receivable linked to a commercial transaction or transactions with an original maturity of less than or equal to one year. Eligible receivables do not include those associated with securitisations, sub-participations or credit derivatives or amounts owed by affiliated parties. A
CREDIT RISK MITIGATION Annex VIII, Part 1, Para. 21 Other physical collateral The Competent Authorities may recognise as eligible collateral physical items of a type other than real estate collateral, if satisfied as to the following: (a) liquid markets for disposal of the collateral do exist in an expeditious and economically efficient manner; and (b) well-established, publicly available market prices for the collateral do exist. The institution must be able to demonstrate that there is no evidence that the net prices it receives when collateral is realised deviates significantly from these market prices. A
CREDIT RISK MITIGATION Annex VIII, Part 1, Para. 28 Eligible protection providers The Competent Authorities may recognise as eligible collateral physical items of a type other than real estate collateral, if satisfied as to certain conditions. A
CREDIT RISK MITIGATION Annex VIII, Part 2, Para. 9a (ii) Minimum requirements for the recognition of receivables as collateral Credit institutions must take all steps necessary to fulfil local requirements in respect of the enforceability of security interest. There shall be a framework which allows the lender to have a first priority claim over the collateral subject to national discretion to allow such claims to be subject to the claims of preferential creditors provided for in legislative or implementing provisions. A
CREDIT RISK MITIGATION Annex VIII, Part 3, Para. 12 Permission of internal models approach for calculation of fully adjusted exposure value (E*) The Competent Authorities may permit credit institutions meeting certain requirements to use an internal models approach taking into account correlations to calculate the adjusted exposure value for exposures resulting from the application of a master netting agreement. A
CREDIT RISK MITIGATION Annex VIII, Part 3, Para. 19 Permission to use empirical correlations within and across risk categories The Competent Authorities may allow credit institutions to use empirical correlations within risk categories and across risk categories if they are satisfied that the credit institution’s system for measuring correlations is sound and implemented with integrity. A
CREDIT RISK MITIGATION Annex VIII, Part 3, Para. 43 Own estimates of volatility adjustments (categories of security) When debt securities have a credit assessment from a recognised ECAI equivalent to investment grade or better, the Competent Authorities may allow credit institutions to calculate a volatility estimate for each category of security. A
CREDIT RISK MITIGATION/TRANSITIONAL PROVISIONS Annex VIII, Part 3, Para. 72 Reduced LGDs for leasing transactions Until 31 December 2012, the Competent Authorities may, subject to the indicated levels of collateralisation, allow credit institutions to assign lower levels of LGD for senior exposures in the form of Commercial Real Estate leasing and of equipment leasing. At the end of this period this provision shall be reviewed. A
CREDIT RISK MITIGATION Annex VIII, Part 3, Para. 73 Alternative treatment for real estate collateral (50% risk-weight) Subject to the requirements of this point and point 74 and as an alternative to the treatment in points 68 to 72, the competent authorities of a Member State may authorise credit institutions to assign a 50 % risk weight to the Part of the exposure fully collateralised by residential real estate property or commercial real estate property situated within the territory of the Member State if they have evidence that the relevant markets are well-developed and long-established with loss-rates from lending collateralised by residential real estate property or commercial real estate property respectively that do not exceed the following limits (…) A
CREDIT RISK MITIGATION Annex VIII, Part 3, Para. 89 Sovereign guarantees The Competent Authorities may apply reduced risk weights to exposures or portions of exposures guaranteed by the central government or central bank, where the guarantee is denominated in the domestic currency of the borrower and the exposure is funded in that currency. A
SECURITISATION Article 152(10)(b) Discretion to disapply the securitisation framework For banks that do not move to standardised approach in 2007, the treatment of securitisation may be disapplied by competent authorities A
SECURITISATION Annex IX, Part 4, Para. 30 Treatment of certain retail exposures subject to early amortisation provision The Competent Authorities may apply a treatment analog the lines of para. 26 to 28 in the case of securities subject to an early amortisation provision of certain retail exposures (uncommitted, unconditionally cancellable without prior notice, early amortisation is triggered by a quantitative value in respect of something other than the three months average excess spread) for determining the conversion figure. A
SECURITISATION Annex IX, Part 4, Para. 53 (last sentence) Application of the simplified Supervisory Formula Method The Competent Authorities may permit credit institutions to apply for securitisations involving retail exposures the Supervisory Formula Method using simplifications for certain risk parameters. A
OPERATIONAL RISK Article 102.4 & Annex X, Part 4, Para. 1 and 2 Combination of approaches The Competent Authorities may allow institutions to use a combination of approaches. A
OPERATIONAL RISK Article 104.3 Alternative Standardised Approach

The Competent Authorities may under certain conditions authorise institutions to use a alternative indicator to calculate its capital requirements. A
OPERATIONAL RISK Article 105.4 Qualifying criteria for AMA within the same group The Competent Authorities may allow the qualifying criteria set out to be met by the parent and its subsidiaries considered together. A
OPERATIONAL RISK Annex X, Part 2, Para. 3 and 5 Alternative Standardised Approach The Competent Authorities may authorise institution to calculate its capital requirement using an alternative standardised approach. A
OPERATIONAL RISK Article 20.2
Dir. 2006/49/EC		 Minimum level of own funds The Competent Authorities may allow investment firms with limited licence to provide own funds which are always more than or equal to the higher of the capital requirement for credit and market risk or 25% of the preceding years fixed overheads. A
OPERATIONAL RISK Article 20.3
Dir. 2006/49/EC		 Minimum level of own funds The Competent Authorities may allow investments firms which hold 730 000 EUR in initial capital, but which fall within certain categories, to provide own funds which are always more than or equal to the higher of the capital requirement for credit and market risk or 25% of the preceding years fixed overheads. NA
QUALIFYING HOLDINGS OUTSIDE THE FINANCIAL SECTOR Article 122.1 Special treatment for insurance undertakings Member States may exempt insurance sector undertakings from the general limits established for qualifying holdings. A
QUALIFYING HOLDINGS OUTSIDE THE FINANCIAL SECTOR Article 122.2 Alternative - deduction Member States may decide not to apply limits on qualifying holdings, provided excess is deducted from own funds. A (on a case by case basis)
TRANSITIONAL PROVISIONS Article 153, Para. 1 (first sentence) Transitional treatment for certain property leasing transactions The Competent Authorities may, until December 31, 2012, allow leasing exposures on offices or commercial premises in their territory and subject to certain conditions, to be rated 50%. NA
TRANSITIONAL PROVISIONS Article 153, Para. 2 (second sentence) Transitional definition of the secured portion of a loan The Competent Authorities may, until December 31, 2010, allow, for the purpose of defining the secured portion of a loan, recognise elligible collateral other than the one meeting the requirements. NA
TRANSITIONAL PROVISIONS Article 154.1 Transitional use of a different definition of past due Until December 31, 2011, the Competent Auhtorities may set the number of days past due up to 180 days if local conditions make it appropriate (for the purposes of application of the standardised approach). The specific number may differ across product lines. NA
TRANSITIONAL PROVISIONS Article 154.2 Transitionally shorter test of use Institutions applying for the use of IRB before 2010 may benefit from a test of use shorter than 3 years but above 1, until December 31, 2009. A
TRANSITIONAL PROVISIONS Article 154.3 Transitionally shorter requirement of use for LGD/conversion factors estimates For those institutions applying for the use of their own LGD/conversion factors estimates, the three-year period of experience in use required by Article 84.4 may be reduced to two until December 31, 2008. A
TRANSITIONAL PROVISIONS Article 154.4 Transitional treatment for certain types of participations The Competent Authorities may, until December 31, 2012, allow credit institutions to continue to apply Basel I treatment to certain types of participations. A
TRANSITIONAL PROVISIONS Article 154.6 Transitional exemption for certain equity exposures The Competent Authorities may, until December 31, 2017, exempt from IRB certain equity exposures held on December 31, 2007. A
TRANSITIONAL PROVISIONS Article 154.7, first two sentences Transitional default definition for corporate exposures Until 31 December 2011, for corporate exposures, the competent authorities of each Member State may set the number of days past due that all credit institutions in its jurisdiction shall abide by under the definition of ‘default’ set out in Annex VII, Part 4, point 44 for exposures to such counterparts situated within this Member State. The specific number shall fall within 90 up to a figure of 180 days if local conditions make it appropriate A
TRANSITIONAL PROVISIONS Article 155 Transitional calculations: standardised approach - operational risk (credit institutions) Until December 31, 2012, the "trading and sales" business line may be applied a 15% factor, if it represents at least 50% of the total relevant indicators. A
TRANSITIONAL PROVISIONS Annex VII, Part 2, Para. 8 (second subparagraph) Transitional LGD for covered bonds Until December 31, 2010, covered bonds may be assigned an LGD of 11.5% A
TRANSITIONAL PROVISIONS Annex VII, Part 4, Para. 66, 71, 86 and 95 Transitional reduction of minimum length of observation periods Member States may transitionally allow a reduction of the minimum length of the observation periods required for own estimations of PD, LGD and CCF, subject to an absolute minimum of 2 years. A
TRANSITIONAL PROVISIONS Article 44
Dir. 2006/49/EC		 Transitional calculations: standardised approach - operational risk (investment firms) Until December 31, 2012, the "trading and sales" business line may be applied a 15% factor, if it represents at least 50% of the total relevant indicators. A
TRANSITIONAL PROVISIONS Article 46
Dir. 2006/49/EC		 Alternative transitional operational risk requirement Until December 31, 2011, the Competent Authorities may choose not to apply requirements for operational risk as set out in Article 75(d) of directive 2006/48/EC to low size investment firms. An alternative treatment applies instead. NA
TRANSITIONAL PROVISIONS Article 47
Dir. 2006/49/EC		 Transitional applicability of recognized specific risk models Until December 31, 2009, or any other date specified by the Competent Authorities on a case-by-case basis, it may be provided that for institutions that have received specific risk model recognition prior to January 1, 2007, previous requirements (as in the old directive) apply. A
TRADING BOOK Article 18.2 and 3
Dir. 2006/49/EC		 Application of the banking book rules to trading book, if not material The Competent Authorities may allow institutions to apply banking book rules to their trading book exposures, provided the trading book activities does not exceed certain limits. A
TRADING BOOK Article 19.2
Dir. 2006/49/EC		 Specific risk requirement for covered bonds Member States may set a reduced specific risk requirement for covered bonds, with reductions similar to those applied in the banking book under the standardised approach. NA
TRADING BOOK Article 19.3
Dir. 2006/49/EC and Annex I, point 52		 Third country CIU A Competent Authority of one member state may make use of  the approval of another one without conducting its own assessment NA
TRADING BOOK Article 26
Dir. 2006/49/EC		 Offsetting trading positions For the purposes of calculation of consolidated capital requirements, the Competent Authorities may authorise the offsetting of trading (trading book, commodities, etc.) positions even when they are booked in different institutions within the group, subject to certain conditions. A
TRADING BOOK Article 33.3
Dir. 2006/49/EC		 Alternative requirements for valuation in absence of readily available market prices The Competent Authorities, in the absence of readily available market prices, may choose not to apply daily mark to market and, instead, require institutions to apply alternative methods subject to their approval.

A
TRADING BOOK Annex I, Para. 4, 2nd subparagraph (first sentence)
Dir. 2006/49/EC		 Capital requirement for an exchange-traded future Subject to certain conditions, the Competent Authorities may allow that the capital requirement for an exchange-traded future contract be equal to the margin required by the exchange. NA
TRADING BOOK Annex I, Para. 4, 2nd subparagraph (second sentence)
Dir. 2006/49/EC		 Capital requirement for OTC derivative cleared by a clearing house Subject to certain conditions, the Competent Authorities may allow that the capital requirement for an OTC derivative cleared by a clearing house to be equal to the margin required by the clearing house. NA
TRADING BOOK Annex I, Para. 5, 2nd subparagraph
Dir. 2006/49/EC		 Prescription of specific methodologies for the calculation of delta The Competent Authorities may prescribe that delta be calculated following methodologies specified by them. A
TRADING BOOK Annex I, Para. 5, 3rd subparagraph
Dir. 2006/49/EC		 Capital requirement for exchange-traded written options and OTC options cleared by a clearing house Subject to certain conditions, the Competent Authorities may allow that the capital requirement for an exchange-traded written option, or an OTC option cleared by a clearing house to be equal to the margins required by the exchange or the clearing house, respectively. NA
TRADING BOOK Annex I, Para. 5, 3rd subparagraph
Dir. 2006/49/EC		 Capital requirement for exchange-traded bought options and OTC bought options cleared by a clearing house Subject to certain conditions, the Competent Authorities may allow that the capital requirement for an exchange-traded bought option, or an OTC bought option cleared by a clearing house to be equal to the requirement for the underlying instrument. A
TRADING BOOK Annex I, Para. 14
Dir. 2006/49/EC		 Specific risk charge for a non-qualifying issuer The Competent Authorities may require that instruments issued by non-qualifying issuers are applied a specific risk capital charge higher than 8% or 12% and/or disallow offsetting for the purposes of general market risk between such instruments and any other instrument. A
TRADING BOOK Annex I, Para. 26
Dir. 2006/49/EC		 Use of duration instead of the standard system for calculation of the general risk of traded debt positions The Competent Authorities may, either in general or on an individual basis, allow institutions to use a system for calculating the general risk for traded debt instruments which reflects duration instead of the system set out in the directive. A
TRADING BOOK Annex I, Para. 35, first sentence
Dir. 2006/49/EC		 Reduced specific risk requirement for certain equity portfolios The Competent Authorities may allow certain equity portfolios to be assigned a specific risk requirement of 2% instead of 4%. A
TRADING BOOK Annex I, Para. 35 (last sentence)
Dir. 2006/49/EC		 Alternative maximum weight of an individual position in an institution's equity portfolio The Competent Authorities may authorise that individual positions represent a maximum of 10% of the total equity portfolio (instead of 5% as in the Directive), provided that the sum of such positions do not exceed 50%. A
TRADING BOOK Annex III, Para. 2.1, last sentence
Dir. 2006/49/EC		 Discretional use of net present value for determining the open position in currencies or gold The Competent Authorities have the discretion to allow institutions to use net present value when determining their open positions in currencies or gold. A
TRADING BOOK Annex III, Para. 3.1
Dir. 2006/49/EC		 Lower capital requirements for closely correlated currencies The Competent Authorities may allow institutions to provide lower capital requirements for positions in closely correlated currencies, as defined in the Directive. A
TRADING BOOK Annex IV, Para. 7
Dir. 2006/49/EC		 Definition of 'positions in the same commodity' The Competent Authorities may regard, in some cases, different but closely linked commodities as the same, for the purposes of calculating the position in a commodity. A
TRADING BOOK Annex IV, Para. 8
Dir. 2006/49/EC		 Capital requirement for exchange-traded commodities OTC commodity derivatives cleared by a clearing house Subject to certain conditions, the Competent Authorities may allow that the capital requirement for an exchange-traded commodity, or an OTC commodity derivative cleared by a clearing house to be equal to the margins required by the exchange or the clearing house, respectively. NA
TRADING BOOK Annex IV, Para. 10
Dir. 2006/49/EC		 Prescription of specific methodologies for the calculation of delta for derivatives on commodities The Competent Authorities may prescribe that delta for commodity derivatives be calculated following methodologies specified by them. A
TRADING BOOK Annex IV, Para. 10, three last subparagraphs
Dir. 2006/49/EC		 Capital requirement for exchange-traded options and OTC options cleared by a clearing house Subject to certain conditions, the Competent Authorities may allow that the capital requirement for an exchange-traded written option, or an OTC option cleared by a clearing house to be equal to the margins required by the exchange or the clearing house, respectively. Also OTC bought options may be assinged the same requirement as the underlying commodity. NA (first two subparagraphs) A(last subparagraph)
TRADING BOOK Annex IV, Para. 14
Dir. 2006/49/EC		 Offsetting positions in the same commodity The Competent Authorities may allow positions in the same commodity - or in commodities regarded as the same - to be offset prior to assignement to the appropriate maturity band.     A
TRADING BOOK Annex IV, Point 21 Dir. 2006/49/EC Alternative minimum spreads for commodities risk capital requirements Competent authorities may authorise institutions to use alternative minimum spread, carry and outright rates provided that the institution fulfils certain prerequisites.
 NA
LARGE EXPOSURES Article 30.4 Dir. 2006/49/EC 0% or 20%-weighing of assets constituting claims/other exposures on recognised third-country investment firms and recognised clearing houses and exchanges for large exposures purposes
 Competent authorities may allow assets constituting claims and other exposures on recognised third-country investment firms and recognised clearing houses and exchanges to be treated like comparable claims on institutions (0% or 20% weighing). NA
LARGE EXPOSURES Article 32.2 Dir. 2006/49/EC Reporting and LE limits in case of alternative determination of own funds of institutions
 Subject to certain conditions, competent authorities may permit institutions which are allowed to use the alternative determination of own funds under Article 13(2) to use that determination for the purposes of reporting and compliance with or temporal breach of limits. A
LARGE EXPOSURES Article 111 (1) last subparagraph LE limit for exposures to institutions Member States may set a lower large exposure limit than EUR 150 million for exposures to institutions NA
LARGE EXPOSURES Article 113 (4)(a) exemption or partial exemption from the application of Article 111(1) exemption or partial exemption of covered bonds from the application of Article 111(1) PA
LARGE EXPOSURES Article 113 (4)(b) exemption or partial exemption from the application of Article 111(1) exemption or partial exemption of exposures to from the application of Article 111(1) PA
LARGE EXPOSURES Article 113 (4)(c) exemption or partial exemption from the application of Article 111(1) exemption or partial exemption of exposures incurred by a credit institution to parent undertaking or subsidiaries under certain conditions from the application of Article 111(1) PA
LARGE EXPOSURES Article 113 (4)(d) exemption or partial exemption from the application of Article 111(1) exemption or partial exemption of exposures to regional central credit institutions with which the credit institution is associated in a network and which are responsible for cash-clearing operations within the network from the application of Article 111(1) NA
LARGE EXPOSURES Article 113 (4)(e) exemption or partial exemption from the application of Article 111(1) exemption or partial exemption of certain exposures to credit institution incurred by credit institutions operating on a non-competitive basis from the application of Article 111(1) PA
LARGE EXPOSURES Article 113 (4)(f) exemption or partial exemption from the application of Article 111(1) exemption or partial exemption of exposures to institutions that do not last longer than the following business day and are not denominated in a major currency from the application of Article 111(1) NA
LARGE EXPOSURES Article 113 (4)(g) exemption or partial exemption from the application of Article 111(1) exemption or partial exemption of exposures to central banks in the form of required minimum reserves, denominated in national currency from the application of Article 111(1) A
LARGE EXPOSURES Article 113 (4)(h) exemption or partial exemption from the application of Article 111(1) exemption or partial exemption of exposures to central banks in the form of statutory liquidity requirements, funded in national currency, rated investment grade from the application of Article 111(1) A
LARGE EXPOSURES Article 113 (4)(i) exemption or partial exemption from the application of Article 111(1) exemption or partial exemption of 50% of certain medium/low risk off-balance sheet items and 80% of certain loan guarantees by mutual guarantee schemes from the application of Article 111(1) PA
LARGE EXPOSURES Article 113 (4)(j) exemption or partial exemption from the application of Article 111(1) exemption or partial exemption of legally required guarantees in the context of mortgage loan financing by issuing mortgage bonds from the application of Article 111(1) NA


For an overview regarding the exercise of the options and national discretions contained in the directives 2006/48/EC and 2006/49/EC in the EU Member States see the corresponding table on the EBA homepage.