Significant risk transfer

When evaluating a transaction in accordance with Article 248 of Regulation (EU) No 575/2013, any assessment of whether the conditions for significant risk transfer as set out in Article 243 or, as the case may be, Article 244 of that Regulation continue to be met should be carried out in accordance with these guidelines and with guidelines EBA/GL/2014/05 on significant risk transfer.

A transaction should be deemed to invalidate the conditions for significant risk transfer if, as a result of the transaction, the reduction in risk-weighted exposure amounts the originator institution initially achieved is no longer justified by a commensurate transfer of credit risk to third parties. The factors to be considered should include:

• (a) the credit risk of the originator institution after undertaking the transaction; and
• (b) the extent to which the capital or liquidity position of the originator institution is affected by the transaction.