78. Competent authorities should achieve a clear view on the planned sources to finance the planned …

Competent authorities should achieve a clear view on the planned sources to finance the planned business activities, including the source(s) of the initial capital amount. Competent authorities should review the information submitted by the applicant credit institution (in particular pursuant to Article 4 of the RTS on information for authorisation) to assess the liquidity profile and the liability structure, with a special focus on the credibility of the underlying assumptions. With respect to the liability structure, the competent authorities should assess the different sources of funding (types of liabilities, instruments and counterparties), the related costs, embedded options and their contractual and behavioural maturities. A clear view on the liquidity profile and the liability structure will allow the competent authorities to assess the projections for the regulatory liquidity and funding ratios such as the LCR¹⁸ and NSFR¹⁹ , also having regard to their development over the planning horizon due to the gradual increase in business activities and the implementation of the funding strategy (e.g. gradual attraction of depositors) in the set-up phase. Competent authorities should also take into account that while in the first year of activities the majority of the available sources of funding are usually stable (e.g. share capital) and the proportion of liquid assets is high, the development of the regulatory ratios may vary depending on the planned business activities and the related funding strategy of the applicant.

¹⁸ See Commission Delegated Regulation (EU) 2015/61 to supplement Regulation (EU) No 575/2013 of the European Parliament and the Council with regard to liquidity coverage requirement for Credit Institutions.

¹⁹ See Title IV – Part Six CRR (introduced in CRR II).

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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