+Sub-Section 1 Funded credit protection
---+Article 195 On-balance sheet netting
---+Article 196 Master netting agreements covering repurchase transactions or securities or commodities lending or borrowing transactions or other capital market-driven transactions
---+Article 197 Eligibility of collateral under all approaches and methods
------+Article 197 1.
------+Article 197 2.
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------+Article 197 8.
---+Article 198 Additional eligibility of collateral under the Financial Collateral Comprehensive Method
------+Article 198 1.
------+Article 198 2.
---+Article 199 Additional eligibility for collateral under the IRB Approach
------+Article 199 1.
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---+Article 200 Other funded credit protection

Sub-Section 1 Funded credit protection

Sub-Section 1 Funded credit protection

1. Overview

,
Article 195 On-balance sheet netting

Article 195

On-balance sheet netting

An institution may use on-balance sheet netting of mutual claims between itself and its counterparty as an eligible form of credit risk mitigation.

Without prejudice to Article 196, eligibility is limited to reciprocal cash balances between the institution and the counterparty. Institutions may amend risk-weighted exposure amounts and, as relevant, expected loss amounts only for loans and deposits that they have received themselves and that are subject to an on-balance sheet netting agreement.
Article 196 Master netting agreements covering repurchase transactions or securities or commodities lending or borrowing transactions or other capital market-driven transactions

Article 196

Master netting agreements covering repurchase transactions or securities or commodities lending or borrowing transactions or other capital market-driven transactions

Institutions adopting the Financial Collateral Comprehensive Method set out in Article 223 may take into account the effects of bilateral netting contracts covering repurchase transactions, securities or commodities lending or borrowing transactions, or other capital market-driven transactions with a counterparty. Without prejudice to Article 299, the collateral taken and securities or commodities borrowed within such agreements or transactions shall comply with the eligibility requirements for collateral set out in Articles 197 and 198.
Article 197 Eligibility of collateral under all approaches and methods
Article 198 Additional eligibility of collateral under the Financial Collateral Comprehensive Method
Article 199 Additional eligibility for collateral under the IRB Approach
Article 200 Other funded credit protection

Article 200

Other funded credit protection

Institutions may use the following other funded credit protection as eligible collateral:

(a) 

cash on deposit with, or cash assimilated instruments held by, a third party institution in a non-custodial arrangement and pledged to the lending institution;

(b) 

life insurance policies pledged to the lending institution;

▼M9

(c) 

instruments issued by a third‐party institution or by an investment firm which are to be repurchased by that institution or by that investment firm on request.

▼C2

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

Requirements

3. Related Standards

Standards