AI Summary of Article 428ak Residual maturity of a liability or own funds
This Chapter outlines the requirements for institutions to assess the residual contractual maturity of their liabilities and own funds to establish applicable stable funding factors. Institutions are required to consider existing options for liabilities, assuming that call options will be exercised by the counterparty at the earliest opportunity, while also recognising reputational factors that may influence non-exercise of options.
Furthermore, deposits with fixed notice periods must be treated according to their respective notice periods, and term deposits according to their residual maturity. Importantly, for liabilities with a maturity of one year or more, specific portions maturing in less than six months must be treated as having a shorter residual maturity.
Article 428ak Residual maturity of a liability or own funds
1. Unless otherwise specified in this Chapter, institutions shall take into account the residual contractual maturity of their liabilities and own funds to determine the available stable funding factors to be applied under Section 2.
2. Institutions shall take into account existing options in determining the residual maturity of a liability or of own funds. They shall do so on the assumption that the counterparty will redeem call options at the earliest possible date. For options exercisable at the discretion of the institution, the institution and the competent authorities shall take into account reputational factors that may limit an institution's ability not to exercise the option, in particular market expectations that institutions should redeem certain liabilities before their maturity.