Question ID: 1456
Regulation Reference: (EU) No 2015/35 - supplementing Dir 2009/138/EC - taking up & pursuit of the business of Insurance and Reinsurance (SII)
Article: 180
Status: Final
Date of submission: 04 Feb 2019
Question
Do government-guaranteed bonds issued in a currency different than the domestic currency of the guarantor get assigned a credit stress risk factor of 0%?
EIOPA answer
Commission staff consider that the intention of the legislator in Article 180(2) of Commission Regulation 2015/35 is that the specific risk factor of 0% applicable to bonds guaranteed by Member States' central government is limited to exposures "denominated and funded in the domestic currency of that central government”. This interpretation is also consistent with the limitation of 0% risk factor for sovereign debt instruments to those instruments denominated and funded in the domestic currency of that central government in Article 180 (2).