AI Summary of Article 422 Outflows on other liabilities
The outlined regulations stipulate that institutions must appropriately categorise their liabilities, distinguishing between operating expenses and those arising from secured lending. Specific percentages are assigned to each category based on collateral quality, with clear delineation for transactions involving public sector entities and central banks.
Moreover, a structured approach is established for handling deposits, particularly in relation to deposit guarantee schemes, and procedures for reporting outflows and inflows are specified. The role of competent authorities is emphasised, allowing for case-by-case consideration of lower outflow percentages under stringent conditions, reinforcing the framework's regulatory compliance mandate.
Article 422 Outflows on other liabilities
1. Institutions shall multiply liabilities resulting from the institution's own operating expenses by 0 %.
2. Institutions shall multiply liabilities resulting from secured lending and capital market-driven transactions as defined in point (3) of Article 192 by:
(a) 0 % up to the value of the liquid assets in accordance with Article 418 if they are collateralised by assets that would qualify as liquid assets in accordance with Article 416;
(b) 100 % over the value of the liquid assets in accordance with Article 418, if they are collateralized by assets that would qualify as liquid assets in accordance with Article 416;
(c) 100 % if they are collateralized by assets that would not qualify as liquid assets in accordance with Article 416, with the exception of transactions covered by points (d) and (e) of this paragraph;