REGULATION (EU) 2016/445 OF THE EUROPEAN CENTRAL BANK of 14 March 2016 on the exercise of options and discretions available in Union law (ECB/2016/4)

the conditions provided for in Article 113(6)(b), (c) and (e) of Regulation (EU) No 575/2013 are met and in particular whether the counterparty is subject to the same risk evaluation, measurement and control procedures as the credit institution and whether the IT systems are integrated or, at least, fully aligned. In addition, they must take into account whether there are any current or anticipated material practical or legal impediments that would hinder the timely repayment of the exposure by the counterparty to the credit institution, other than in the event of a recovery or resolution situation when the restrictions outlined in Directive 2014/59/EU of the European Parliament and of the Council ( 7 ) are required to be implemented;

the intragroup exposures are justified by the group’s funding structure and strategy;

the process by which a decision is made to approve an exposure to the intragroup counterparty, and the monitoring and review process applicable to such exposures, at individual level and at consolidated level, where relevant, are similar to those that are applied to third party lending;

the credit institution's risk management procedures, IT system and internal reporting enable it to continuously check and ensure that large exposures to group undertakings are aligned with its risk strategy at legal entity level and at consolidated level, where relevant.

the credit institution has robust processes, procedures and controls, at individual level and at consolidated level, where relevant, to ensure that use of the exemption would not result in concentration risk that is outside its risk strategy and against the principles of sound internal liquidity management within the group;

the credit institution has formally considered the concentration risk arising from intragroup exposures as part of its overall risk assessment framework;

the credit institution has a risk control framework, at legal entity level and at consolidated level where relevant, that adequately monitors the proposed exposures;

the concentration risk arising has been or will be clearly identified in the internal capital adequacy assessment process (ICAAP) of the credit institution and will be actively managed. The arrangements, processes and mechanisms to manage the concentration risk will be assessed in the supervisory review and evaluation process;

there is evidence that the management of concentration risk is consistent with the group's recovery plan.

there are no practical impediments that would hinder the timely repayment of exposures by a counterparty to the credit institution;

intragroup exposures are justified by the group’s funding structure and strategy;

the process by which a decision is made to approve an exposure to an intragroup counterparty and the monitoring and review process applicable to such exposures, at legal entity level and at consolidated level, are similar to those that are applied to third-party lending;

concentration risk arising from intragroup exposures has been considered as part of the credit institution's overall risk assessment framework.

there are any current or anticipated material practical or legal impediments that would hinder the timely repayment of the exposure by the counterparty to the credit institution, other than in the event of a recovery or resolution situation, when the restrictions outlined in the Directive 2014/59/EU are required to be implemented;

the proposed exposures are in line with the credit institution's ordinary course of business and its business model or justified by the funding structure of the network;

the process by which a decision is made to approve an exposure to the credit institution's central body, and the monitoring and review process applicable to such exposures, at individual level and at consolidated level, where relevant, are similar to those that are applied to third-party lending;

the credit institution's risk management procedures, IT system and internal reporting enable it to continuously check and ensure that the large exposures to its regional or central body are compatible with its risk strategy.

the credit institution has robust processes, procedures and controls to ensure that use of the exemption would not result in concentration risk which is outside its risk strategy;

the credit institution has formally considered the concentration risk arising from exposures to its regional or central body as part of its overall risk assessment framework;

the credit institution has a risk control framework that adequately monitors the proposed exposures;

the concentration risk arising has been or will be clearly identified in the credit institution's internal capital adequacy assessment process (ICAAP) and will be actively managed. The arrangements, processes and mechanisms to manage the concentration risk will be assessed in the supervisory review and evaluation process.

there are no practical impediments to the timely repayment of exposures by a regional or central body to the credit institution;

the regional or central body exposures are justified by the funding structure of the network;

the process by which a decision is made to approve an exposure to a regional or central body and the monitoring and review process applicable to such exposures, at legal entity level and at consolidated level, are similar to those applied to third-party lending;

the concentration risk arising from exposures to the regional or central body has been considered as part of the credit institution's overall risk assessment framework.