Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

Article 4 Calculation of general and specific credit risk adjustments for the purposes of the treatment of expected loss amounts according to Article 159 of Regulation (EU) No 575/2013

  1. (1)

    For the purposes of the treatment of expected loss amounts according to Article 159 of Regulation (EU) No 575/2013, the institution shall calculate the total General Credit Risk Adjustments related to the exposures included in the treatment of expected loss amounts as the sum of those amounts, identified as General Credit Risk Adjustments according to Article 1 of this Regulation, that the institution has assigned pursuant to Article 110(3) of Regulation (EU) No 575/2013.

  2. (2)

    For the purposes of the treatment of expected loss amounts according to Article 159 of Regulation (EU) No 575/2013, the calculation of total Specific Credit Risk Adjustments related to the exposures included in the treatment of expected loss amounts shall be the sum of the amounts of points (a) and (b), excluding exposures in default:

    1. (a)

      amounts identified as Specific Credit Risk Adjustments according to Article 1 which are related to the credit risk of a single exposure;

    2. (b)

      amounts identified as Specific Credit Risk Adjustments according to Article 1 which are related to the credit risk of a group of exposures and which have been assigned according to Article 2.

  3. (3)

    The total Specific Credit Risk Adjustments related to an exposure in default shall be calculated as the sum of all amounts of Specific Credit Risk Adjustments for that single exposure, or as the amounts of Specific Credit Risk Adjustments that the institution has assigned to that exposure according to Article 2.