Alternative approach for exposures to central governments

The reporting institution could carve out only one group (‘central government/A/all controlled or dependent entities of A’) and keep the general treatment for the rest (‘central government/B, C and D/all controlled or dependent entities of B’):

Scenario CG 2: Alternative approach – used for all directly dependent entities

In the scenarios CG1 and CG2, entities A, B, C and D constitute the ‘second level’, i.e. the level directly below the central government (‘first level’). Here, a carve -out from the overall group of connected clients is possible. However, entities A¹ , A² , B¹ and B² are only indirectly connected to the central government. A carve-out on their level is not possible (e.g. both A¹ and A² need to be included in the group ‘central government/A’):

In a variation on the general scenario above, entities A and B are economically dependent (payment difficulties for B would be contagious to A): Assuming that the reporting institution uses the alternative approach only in part, as described in scenario CG 1 above, the following groups of connected clients need to be considered: