19. Independently of the aggregate limit, and in addition to it, institutions should set tighter …

Independently of the aggregate limit, and in addition to it, institutions should set tighter limits on their individual exposures to shadow banking entities. When setting those limits, as part of their internal assessment process, the institutions should take into account:

• a. the regulatory status of the shadow banking entity, in particular whether it is subject to any type of prudential or supervisory requirements;
• b. the financial situation of the shadow banking entity including, but not limited to, its capital position, leverage and liquidity position;
• c. information available about the portfolio of the shadow banking entity, in particular non-performing loans;
• d. available evidence about the adequacy of the credit analysis performed by the shadow banking entity on its portfolio, if applicable;
• e. whether the shadow banking entity will be vulnerable to asset price or credit quality volatility;
• f. concentration of credit intermediation activities relative to other business activities of the shadow banking entity;
• g. interconnectedness as outlined in paragraph 14 e);
• h. any other relevant factors identified by the institution under paragraph 14 a).

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA -

  EN: Guidelines and other publications of the European Banking Authority (EBA), https://www.eba.europa.eu/. © European Banking Authority. Reproduction is authorised provided the source is acknowledged (EBA legal notice). Divided into sections and converted into the GRCA format, the wording unchanged. Only the versions published by the EBA are authoritative.

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