 Welcome to the public hearing, this public hearing which is part of the consultation on the guide and the regulation on the exercise of options and discussions in union law. Thanks everybody for coming here to Frankfurt, to the ECB, on this cold winter day. And we're here today to listen to your views and to your questions that you might have to documents that are meant to harmonize the supervision of banks in the euro area. Just a few housekeeping remarks before you start. Most importantly in the day and age that everybody runs around with something like this. Please mute it. Then on the hearing itself, the focus of this hearing, in the focus of this hearing is two documents that I just mentioned. So any other supervisory issues you might want to raise through the appropriate channels and this goes without saying probably we cannot talk about monetary policy although we are in this great building of the ECB. Last but not least, this hearing is webcast so we are alive and the webcast can be watched again on our website afterwards. So just let you know. On the panel here we have those who were mainly responsible for drafting the two documents that you saw and I just want to introduce now the podium. Then you will hear a few introductory remarks and then we go into the question and answering session and see what is on your mind on these matters. So the podium is led by Ignacio Angeloni, member of the ECB supervisory board. To my right, Chiara Cilioli, she's director general legal services of the ECB. To her right, Eliniko Bevedu, she's head of the supervisory law division. On the other side, on the far right, Giuseppe Siani, he is deputy director general of DGMS4 and to his left, Thomas Jorgensen, he's head of the supervisory policy division. So without further ado, let's start. Ignacio, the floor is yours. Thank you, Rolf, and good morning everybody. And thanks a lot for being here once again. I think that this public hearing which comes close to the end of the public consultation, the public consultation will close on the 16th, today is the 11th, so we still have a few days. But towards the end is common practice to have a public hearing to receive, in addition to the written comments, also questions and comments de viso and to be able to interact more lively with the stakeholders of this policy package. I have to say that of course we are here for you, we are here to help you today, but in some sense you are also here for us. Because the comments and the remarks that you make are very valuable, very useful for us. And I would say particularly in a matter like this one, this particular policy package, which is vast because it covers a large part of European banking legislation, is very complex, there are lots of details. We must make sure that we got it right, not only in a high level sense, but also for what it relates to the specific situation of specific banks in specific countries. So it's important that we get all the details right. And of course this makes it impossible to do it purely top down. We need to receive feedback from the stakeholder for people that are working in specific situations and are capable of appreciating the impact of what we do in their own specific situation. So this means that as Rolf said that we will have of course questions and answer after our short presentation, but we will try to answer on the spot most of the questions that you ask, but there could be situations in which you ask us something that we have to look into a little bit more in detail, in which case we will of course look into it after the public hearing today, and we encourage in those cases particularly to submit questions in writing so that we can be more precise in answering your questions in an exhaustive way. Let me say briefly what this is about and how we went forward in this particular case. So this is a comprehensive package of policy decisions that has been prepared by the supervisory board of the ECB, and it relates to the treatment that the SSM will make of the so-called options and discretions in European banking legislation. There are many provisions in European banking legislation, be it the CRR, CRD or related delegated acts, which are discretionary or optional in nature, meaning that in the case of options that there are different possibilities in the hands of the competent authority or the member state, different possibilities on how to apply a certain provision, or in case of discretions, there is a possibility to apply or not to apply a certain provision. These are elements of flexibility that have been there in European legislation for a long time, and they were uncertain in the legislation for a variety of reasons. First of all, to take into account different conditions of domestic banking markets and the business model of banks in different countries, and also to cater for different supervisory approaches, different supervisory styles at the time in which supervision was still conducted in different countries by different and independent supervisory authorities. So all these provisions were put there at the time in which the SSM was not even envisaged. We were in a situation in which different authorities were applying the legislation, and of course they needed this flexibility. So it is only natural that once the SSM becomes the competent authority for banking supervision in the SSM area, we look at this provision and we decide how to exercise them in a consistent way, in a way that makes sense, taking into account the diversity of the banking population, but also making sure that we are consistent and we practice a level playing field, which is a key element of the mandate that we have. So this is exactly the purpose of what we have been doing. And the main goal, let me stress that, is the fact of having a consistent approach in our supervisory actions to establish high supervisory standards. This is our mandate. We have to promote high supervisory standards and level playing field. And in that way, we are very much at the heart of the mandate of the single supervisory mechanism. So we started earlier this year looking at the legislation and trying to identify what these optional or discretionary provisions were. It's not very easy because they are formulated in different ways. The wordings are different. And yet, they imply a certain amount of discretion for the competent authority of the member state in different ways and to different degrees, depending on a different provision. So we identified a certain number, a large number of this provision, over 150 at the beginning of this year, according to certain criteria. Some of them are entrusted to member states, meaning national legislations, some others competent authority. Of course, we focus on the ones that are entrusted to the competent authority, because this is what we are. We are not a member state. We are a competent authority. This restricted the number of options, discretionary provisions to 122, which are the ones that we focus in our discussion today. Then, next step, we analyzed each of them in great detail, thinking what right way to apply them would be. We conducted a quantitative impact study to assess the quantitative impact of our possible choices on the balance sheet of the banks. Different alternatives can have different impact in order to compare to the extent possible and based on the information that we had. We have systematically liaised with the European Banking Authority and the Commission, the EBA issues technical standards for banking policies that's very much connected with the work on ONDs. The Commission is, of course, the guardian of the treaty and the legislation, so it's important to liaise with them as well. At the end of all this work, we delivered a proposal in July to the supervisory board and the supervisory board has approved this. Then the summer months were devoted to converting all this into technical legal language and here come the two documents that you have in front of you today. One document is a regulation, the other document is a guide. What is the difference between the two? The regulation contains general rules that are binding directly on all banks. We talk about significant banks. So the banks that are supervised directly by the ECB. So regulation sets the rules and the banks can apply them directly without coming to us and asking any permission or waiver or anything like that. Then there are a number of others, actually the majority, of provisions which are more case-by-case and they are by and large contained in the guide. So the guide is really a guidance to our supervisory teams on how to apply provisions when they receive requests for waivers or permissions that they have to be judged on a case-by-case basis. The guide is not a compulsory regulation on banks. It's more a guide to our JSTs, to our joint supervisory teams. We are consulting on both although the legal requirement would be to consult only on the regulation but for transparency and for maintaining a good dialogue with the industry we consult on both and this is what we are going to discuss today, both of these documents. So by doing that, I think we are achieving, we are making a major step towards more harmonious banking rules and more harmonious policies by the single supervisor. We are being prudent in the sense that many of the provisions that you have seen precisely go in the direction of improving the quality of capital, for example in many cases when we accelerate the transition towards the face-dine, fully face-dine or in any case to make sure that our supervisor reaction is as prudent as possible but at the same time, and that's important, fostering banking integration. Particularly in some of the provisions that we will discuss, we wanted to facilitate a more efficient internal management for banking groups, particularly banking groups that operate across borders in the SSM area. That's of course a major goal that the SSM itself wants to achieve, to foster banking integration in the area. At the same time we have to do it in a prudent way because to some extent we are venturing into unexplored territory and so we want to do it gradually. Last but I would say not least, important also, we took an eye systematically to Basel consistency. Basel is the international standards that we contribute to shape as Europe and it's important that unless there are strong reasons against that we try to be as consistent with the Basel standards as we possibly can. I think I would stop here. I'm not going into details because we will discuss the details in the discussion but I think Chiarazziglioli perhaps can say something on the legal underpinnings of all this. Certainly, thank you Ignatio. I will then focus my introductory part on what is the legal basis for the ECB to prepare and adopt the measures that have been now consulted with the public and why does the ECB do it? On which article of the treaty we can only act when we have a power conferred to us by the treaty or by secondary European legislation. The fact that the ECB is the competent authority for all the participating member states is stated in article 91 of the SSM regulation. So the task of ECB is as the competent authority to apply the material rules that are adopted by the EU. In addition, the material rules adopted by the member states implementing the rules of the EU and of course also the standards that are adopted at the European level. Now, when doing that the ECB is exercising the powers of supervisory competent authority. Now, as Ignatio mentioned, the rules that we have to apply include those options and discretion. What are legally options and discretion? They are the space for discretion that the legislator decided to leave to the supervisor to exercise in order to better adapt the action to the reality. And as Ignatio mentioned, there are certain differences among them. The drafting is very different throughout the legislation, but in fact we can categorize those differences. First of all according to who has the power to exercise this discretion and there are options and discretion that are assigned to member states, others that are assigned to the competent authorities and a third smaller group that is assigned to either the member state or the competent authority. Now, the second type of categorization is where they come from and they come, we look at the two legal acts that are fundamental for us, the regulation and the directives of the CRR and the CRD4. And maybe the third type of category we could look at is whether these options and discretion refer to the exercise of discretionality towards an individual bank or perhaps where there is a space to further define the rules that apply to not only one but to a number of banks. If you take these three issues, what we have done in the regulation is to tackle what we have done in general is only to take care of the options and discretion that the competent authorities are assigned. So we don't deal of course with options and discretion that are the competence of member states and we also decided not to deal with those where there would be a choice between member states and competent authority. So we only take what is actually given by the legislator to the competent authority, therefore to the ECB. The second point is in the regulation we deal with options and discretion that are contained in the regulation itself. While it is more in the guide where we look at the discretion left by the directive. Why? Because these are more of an individualized nature while the ones in the regulation are more of a more general nature. So if you take this approach you will see that the ECB has really taken a lot of care after the analysis that Ignacio mentioned to first identify all the existing options and discretion to exercise those that are key for the supervisor and that have priority for the exercise of our tasks. Another point perhaps to be made and very clear is that as also was briefly mentioned already what we exercise are the options and discretion for the significant banks, the ones that we supervise directly. We of course have also supervisory tasks that are more general and then encompass to a different and lighter degree the less significant banks. I'll come to it later. But what we do here is in the regulation in particular to address the significant banks. So just to conclude what we exercise are supervisory powers. There is absolutely no interference with regulation. We act only within the framework that is constituted and created by European law, implementing national law and standards adopted by the EBA and commission competent authorities. If we come to the point of the different approach for significant institution and less significant institution. As I said the regulation applies directly to the significant institution. At the same time the ECB has a responsibility in accordance with Article 6 of the SSM regulation for the effective and consistent functioning of the whole SSM and also for the consistency of supervisory outcomes. Now of course the exercise of an option and discretion has an impact on the rules that will be applied and has an impact on the behaviour of the banks. So the fact that there are different approaches might create problems or perhaps might not create problems. Different approaches between the approach for significant institution and for less significant institution. Now this is for later in the sense that again the ECB decided to approach as a priority the significant institution. Later on it will be considered in which way it would be perhaps advisable in some cases to apply similar rule and in this case the ECB will recommend to the national competent authority to take a similar approach to avoid a disruption or a lack of level playing field. Or perhaps in some cases it might be very well justified to have a different regime because the least less significant institution might require a different type of exercise of an option. So this will be tackled later and it is a second step only after we have catered for the significant institution. I would like maybe to mention that this is not only the ECB perspective this approach has been discussed on the supervisory board and some national competent authority have already expressed an interest to accelerate this work because it's very, very important to coordinate and to be aware of how to tackle these options and discussion also for the less significant institution. The last point I would touch upon is the nature of the two documents Inazio already briefly mentioned it but just to summarize the regulation for us is of course the important legal instrument because it buys directly the banks it is European legislation it also is very, very specific it creates obligation for the supervised entity this is why our procedure or the legislator has foreseen that we need to consult because of the very strong and in-depth impact that it has. Of course regulation needs to be applied and taken into account all the general principles of European law so proportionality, equal treatment, legitimate expectations and so on. So this is of course there but of course it is a very defined step in the direction of further harmonizing the approach in the supervision for the significant institution. It will enter into force 20 days after publication and from that moment it will be law. Now the guide is a different document it is not binding directly the banks it is rather self-binding the ECB it is an indication to the outside world of the criteria that will be followed when taking individualized decisions. So it is an indication to also help planning help the expectation of the banks when they make their request. At the same time it is not impossible for the ECB to take a slightly different approach if it is necessary. So in this case however it will be necessary to accurately motivate why a certain criterion is applied but in a different way or is applied only partially. Again with respect to the principles of proportionality, equal treatment and legitimate expectation. So I think the guide is nevertheless extremely important for the banks to be aware of the approach of the ECB supervisor. At the same time it is different and this is why we were even not obliged as Ignacio mentioned to consult but we've decided to do it nevertheless because we consider the two documents are closely linked. I'll stop here if this is enough. Thank you very much. So we are now opening the floor to your questions and the idea is to give everybody the same opportunities to ask questions so therefore I wanted to ask you to stick at first to the two questions that are closest to your heart that are most important to you and then we move on to the next participant who has questions and we can do as many rounds as necessary in the time allotted so that every question can be covered. We have microphones in the room so please wait till you get one otherwise the people particularly on the webcast won't understand you and it would be nice if you would state your name and your organisation so that everybody knows who is questioning. So who wants to be the first to ask a question? Good morning, Sergio Garizzi from the Italian Banking Association. As European banking industry we have stressed the three principles that have been addressed by the proposers of the ACB although we have still some comments to make. These principles are first the level playing field and we note that in this respect the proposal maintain the stricter for transitional provisions maintain stricter rules introduced by national laws so in this respect there will be no full harmonisation of rules but also for the transitional period stricter rules will remain. We had suggested a different approach that can combine legitimate expectations and maximum harmonisation that is to harmonise at the most favourable level. The second principle was the free flow of capital and liquidity and here also there are important improvements in the proposals nonetheless we know that there are still strict requirements on liquidity waivers for example and we see the 70% limit on high quality liquid assets as a very pessimistic approach that assumes that only 25% of the banking union has been achieved whereas I think we can assume that much more progress has been done we may still be in a transition period but 75% for three years seems to us very strict as well as the documentation required for the waivers are very strict, costly and may create disincentives to the request. As the last point legitimate expectations these have been clearly addressed and Chiara and others have mentioned it this morning and we welcome this we note that nonetheless for some provisions these expectations are not fully respected it is the case of the rise of deductible percentages for GTA depending on future profitability that has increased immediately in the proposal it is the case of the shortening of the period of non-deductible insurance holdings and here we understand that legitimate expectation has to do with concrete events and choices we note that capital holdings are different from other elements of the capital definitions as they are anticipated by the markets and if you plan to sell or buy holdings this has to rely on a stable period of time where provisions are taken. We have other comments but I think the main one is this one and maybe I can intervene later in the discussion. Thank you. Because there were actually many questions not only which I'm grateful for but we have a limit of two questions it doesn't matter. First of all let me take the opportunity to say we appreciate a lot the support but also the stimulus of the European Banking Association to which you belong as an association. The EBF they have already opened an office in Frankfurt recently and I think they will be very valuable partners for the ECB particularly for the supervisory work going forward. You made three points or three questions. One the first relates to the how to treat the transitionals and how to treat the situations in which national authorities have already decided for their own separate independent treatment of those transitionals. We've discussed that at length, pros and cons. One is full level playing field homogeneity on the other hand is prudence and both these criteria are important in our balance approach. We have to consider that this is a transitional problem anyway so in 2018 the problem will disappear. So the question in this short transitional period whether to admit that the more prudent if it is more prudent national treatment could continue to exist and on balance considering that this is transitional we thought that the criterion of prudence would be preserved, would have to be preserved. In many cases and I talked to banks and people in the market et cetera most people are now beginning to focus on fully faced in situations as opposed to the transitional situation. So I think that in terms of the impact that this has is relatively limited but this was the reason why we've chosen this approach. Your second point very important the free flow of capital and liquidity, the openness, the integration of the banking market. This is important for large banks particularly. As far as capital is concerned our reading of the CRR is that cross-border waivers of capitals are not possible. So we are talking here about cross-border liquidity waivers. There again, openness versus prudence we have noted that there are certain subsidiaries in the SSM territory, subsidiaries of banks that are established in other countries within the same SSM areas that are systemic in nature either because of their size or because the type of business et cetera et cetera. By the way, those subs that are systemic if one focuses on the size criteria on the 30 billion are about 20 in over I think a total number of subs in the SSM area which is thousands, measures in a thousand. We're talking about the tiny number of subs of course very important quantitatively for which one has to be prudent. That's the key point. And we thought that eliminating altogether potentially through waivers liquidity requirement for those systemic subs all of a sudden would not fulfill the criteria of prudence and we would better off doing it this in a gradual way. So how we did it is we the LCR which came in force in October as you know is itself phasing in and there is a period of phasing in from 60% to 100%. And so the obligation at the beginning, the obligation for the sub will be 75% of their fully phased in LCR requirements, 75% or if it is lower the requirement that is applied on the parent because it wouldn't make sense to ask to the sub to have a more stringent criterion than the parent. So we have these two parameters that one has to weigh and we indicate in the guide as you may see that we want to open this further in the future. We already indicate that in 2018 we want to go down to 50%. Of course that would be another decision by the supervisory board but that's the direction. We want to make it more and more open but with prudence. Concerning the adjustment for the phasing out in this case of the DTAs and the shortening of the deduction for insurance holdings, again, simplicity versus openness of the systems versus prudence. This is again the criterion that we have chosen and we thought that we should favor also transition as rapidly as possible to a simpler system. And this is what there is a standard phasing out schedule in the Basel provision which goes on to 2018. So in the vast majority of cases we have tried as much as possible to put ourselves in line with that phasing out. That's I think the criterion that we have applied. I don't know if Giuseppe wants to add something on this. Giuseppe is our man that bridges Basel with Europe. Maybe one or two points if I may. I also raised the issue of the documentation being too burdensome as part of your second quest. I think the starting point is always the criteria that are set out in the CRR. And then there is one criterion that is very important which is the need to ensure that there is no legal impediment to the free movement of liquidity. So in this respect we need to have an update legal assessment for two reasons. First because the legal situation in different countries might be different and also because the legal situation evolves over time. So asking an updated legal opinion does not look so burdensome. Second comment is that most of the documentation that we ask should in principle already be available to the bank. For example the corporate structure. So I think that overall if you think of the achievement also in terms of supervision and regulation that we try to grant the waiver to mobilize liquidity within the Eurozone. I think that if you assess the cost and the benefits I think that it's not really so burdensome from my perspective. On the third point I couldn't agree more with what you said that we try to converge to Basel again in the transition. So the general policy decision there was to try to converge again towards the five year transition period set out in Basel. Let me add that this element of prudence in the treatment of liquidity allowed us also to be relatively more open on the large exposure side. You may have seen that we admit the possibility of full waivers in the large exposures intra-group, cross-border, subject waivers of course, the criteria and the conditions and the specifications etc. But there we have full opening and I would have been a little bit less relaxed in doing that hadn't we had a relatively more prudent approach on the liquidity side. Chiara on the legal side. Perhaps one brief comment on the issue of legitimate expectation just to avoid any misunderstanding. So legitimate expectation is a protected concept but also a limited one. So first of all one needs to realize that we're dealing with expert economic operators and it cannot be that the process of the introduction of the single banking union has been a gradual one, a relatively long one. It was clear since a couple of years that there will be a new supervisor and it was understandable also to the banks that the new supervisor will have to make new assessment and exercise these options and discretion. The court has been very very clear in stating that it was a similar parallel situation but it was talking about traders but anyway that it is impossible to claim to have a legitimate expectation that because there is a certain policy that policy will not change. So clearly we talk of legitimate expectation when there are certain conditions it needs to be unconditional, consistent and assurances by the authority that is competent in a certain direction so that people have planned and organized themselves etc. We're not excluding at all that we might face some of these situations but this is different from saying there are legitimate expectations therefore we expect that you not to take a different approach or not to change a certain direction that was previously set by a national competent authority. In particular I would say in the content that we have today in the regulations with the more general approaches it is more probable that legitimate expectation would arise in relation to an individual bank and therefore in the context of the guide and then they will be certainly taken into account and maybe a last point the legislator also is aware of the legitimate expectation issue and precisely all these transitions are there in order to take that into account. So one way of cater for legitimate expectation is to allow people to phase in or phase out so a lot of it is already done. So just to try to give the right dimension to the issue of legitimate expectation which is something we will consider but also has a limited scope. Thank you very much. Can you help? Well good morning Michel-Bilger. I'm coming back on the first point of Sergio on the transitional measures because phase in ratios are very important still because for example there are the basis of the stress tests next year. There are also the basis of the TILAC calculations. There are basis of the SREP decisions and requirements. So I can understand the point of balance between level playing field and prudence but just one example, the goodwill, deduction of goodwill. I still do not understand why it would be more prudent to deduct in France 100% of the goodwill whereas in Germany it's only 60%. So my question is, is this still a possibility to change and to come back on the reference to the national rules? In cases where the rules, the national rules are stricter than the harmonized rules you are proposing. Thank you. The first point, the first point that Mr. Lugarese raised. So the combination of stricter national rules versus the general rule that we now make it a little bit... Well, I'm taking from the lawyers the definition of legitimate expectation meaning that there is a well-grounded reason for a market operator to expect based for example on statements or actions undertaken by the authorities that on which their expectation is grounded. This is what legitimate means. In this case there was a decision of the national authority. So I think that was a particularly strong ground for us to think that we should respect those legitimate expectations plus there is of course the sense of prudence. If a particular treatment has been considered as appropriately prudent in a given national context and again we are talking about the transitional situation which is not long. We are moving into the regime, why not keep it? That was, I'm being very simple but we are applying common sense here to some extent. That was the criterion that we have followed. Mr. Zutatski. Thank you. Martin Zutatski with the German Savings Banks Association. I have one procedural remark and one remark or question regarding the content of the consultation. First the procedural, we have the impression and we appreciate that very much that the ECB has put a lot of work into the preparation of the consultation. At least it was, it were 122 O and Ds that are consulted right now. But at the same time we have the impression that even foreign ECB consultation relatively little time is allocated to the consultation itself. So we would certainly with a view on a future consultation next year regarding O and Ds for LSIs we would certainly prefer and argue for a longer consultation period of say two to three months. Now the content question that I have relates to article 42 to CRR where the CRR obviously states that there might be or maybe an application of IFRS for prudential purposes even at institutions that account according to a national gap. 24 to CRR of course. And obviously 24 only applies to groups under the scope of prudential consolidation. Now the SSM regulation as we are all aware very clearly states that due to the SSM there may not be a change to the accounting regime and that the ECB and the SSM may not require institutions to apply different accounting than what is legally required say the national gap versus the IFRS accounting. The consultation states that there is an impact study currently being conducted regarding this option in 24 to CRR and I would just like to ask you to elaborate a little further on the impact study and on how the ECB is going to deal with the discrepancy between the SSM regulation and this option. Thank you. Procedural, you want to say something about the length? Yeah, thank you very much for your comment on the procedurals and they're very much appreciated. We will take this into account for future planning. On the second point be assured that we cannot and we will not change the accounting standards. As a result of this maybe one day the accounting standards will change but will not be on this table under the change. Having said that, article 24.2 gives the option or the discretion depending on the point of view to the competent authority to apply for certain particular items of the balance sheet that are particularly relevant from a prudential purpose and for the purpose of comparability in order to put everybody on the same footing IFRS in order to estimate the impact of that particular balance sheet item for the risks of the bank. This is something that one can do. It's in the law, right? So this was discussed intensely and it was felt by the supervisory board that it would be useful, potentially important to go and look a little bit more precisely with some quantitative estimates what the actual impact of this would be in some specific relevant cases. So this is what the pilot, I would call it a pilot because it's not on all banks but on a small number of banks and at the same time also not only the impact in terms of the prudence evaluation but also how difficult it is to do. How complex it is for those banks that do not yet apply IFRS how complicated this would be to do it. This is what we are doing. So we have established a subgroup in our organization. This subgroup has looked at a small number of banks and now we're in contact with them. We're trying to see if we can estimate some magnitude and make a pilot evaluation, pilot impact study. This means that no decision has been made at all on this. We just want to see whatever the decision that will be made it's important, it's useful to know what the impact of this is. And we have a strong legal backing here. So I guess if there are unsurmountable problems for some banks we will scope them out. That's not what we want to see if there are so specific instances in which this may become an important point in order for us to guide our decision later. And then the supervisory board and its wisdom will decide what to do on the basis of this information. May I just add a very brief comment on the legal aspect? You have correctly identified that there are different provisions but they are of different nature. So the two provisions in the SSM are part of the recitals. The recitals function in a regulation is to explain the content of the text. They do not confer any rights or obligation. So it is an explanation that nothing in the text of the SSRM should be construed as changing anything of the existing law. Now the article on which we base this is not change is actually existing in the existing law 24.2. So it is an exception perhaps to the normal rules and as such continues to apply. So this is how we make the liaison. Let me add that since, in fact, some of the complications in making this calculation, in fact, are coming from some German banks, we would appreciate very much the support of your organization in helping us understand what is feasible, what is not feasible, what is useful, what is not useful. A gentleman with a gray hair. You can hear in the Deutsche Börse group. I have three small questions if you allow in order to understand certain topics. First one is on the large exposures. Of course, with regards to article 493, there is national discretion. There's national discretion, sorry for that. There's national discretion in order to allow the choices of article 402. So if a country does not apply the rules of 493, it's of course also a decision not to apply the options. So the question is how 493 and 402 come together and what may be still the basis for you to execute the options under 402. So there we see some open questions. The next one is on article 12. In article 12 to A, exposures to ECB are named. However, the exposures will be to the national centre banks and not to the ECB, so maybe there's need for clarification that you mean the national centre banks of the euro system. Third item I have is on article 13, which refers to article 12 of the delegated regulation related to the LCR. Here, the regulation referred to has two parts. One is giving the comprehensive authority the right to determine the major indices and the second one is giving a clear right to the institutions to choose the index itself if the national competent authority has not done so. What you're doing now is you just refer to the decision done by an authority, but I think you cannot exclude the right of the credit institution to choose its own index if the national competent authority has not done so or contrary, you need to choose the index country by country within the SSM zone. Let me start with the first. I'm not sure that I will be able to provide full answer to all of them. In the case of this, I would encourage you if you have time in the coming days to write it down and send it because that will... Now, our interpretation of the interaction between 493 and 402 is slightly different. I call on my legal... When the option discretion can be exercised either by the member state or by the competent authority and the member state has decided not to do so, our interpretation is that the competent authority is in charge. And so we fall into the case in which the large exposure waiver is onto the competent authority. I think this is slightly different from the way you described at the beginning, but I'm asking Chiara who probably knows me. I think you reflected correctly our understanding. So it's not a decision of the member state not to do it. Is that the member state doesn't do it? It goes to the... The point is the member state may have decided explicitly not to apply and the only choice not to apply is not to write it in the law. So how do we distinguish between the pure decision not to apply by just doing nothing with the decision to leave it to the discretion to the competent authority? How can you distinguish these two situations? That's the question where you need to find an answer for. That's the only point. Okay, we'll look into this. On the central bank, we're talking about European central banks, not because there is also an issue of third country central bank, but that's not what you refer to. Giuseppe or Thomas, I don't know if you want to... I think it's correct that we are talking about European central banks here. Yes. Then the last one. Can you help on the last one, Thomas? Yeah, I think we will need to look into this, whether there is a right for the institution to choose that themselves. If this is the case, we will need to look into this, and we'll come back. Thanks. Please, senior, there are very good points. So if you can really help clarify also in written forms, I would help so we will look at that. The microphone is just next to you. Hello, my name is Mariano Lazzarte from KPMJ Spain. My question is much easier than the previous one, is that you have said, Kiera, that it will enter into force 20 days later, and in the document it says that it will come out on March. So we really expect April to be fully applicable. Thank you. As I said, it will be 20 days after publication. We don't know the exact date yet, but in principle I think your expectation is correct. That's our aim. But it will always be 20 days after publication. So one day up or down depends when the publication comes out. This is a general rule in new law to ensure that everybody is aware before it becomes bound by the rules of regulation. 20 days after publication and this is what will happen. Hello, my name is Gala Hoitzinger from Erste Group. I have a question regarding Article 4, where you mentioned that for the default definition you impose 90 days past due for all exposures, for all portfolios, also for those who are currently, there's a different 180 days past due definition. And we were wondering how the ECB sees the process of implementing such a change in terms if this means a change in models, a material change in models, and the application, the validation processes that need to be implemented in the banks. Do you have any background information on that? For this specific options, there are only a few member states that impose 180 days. It's a very limited number. So we have analyzed this and come to the conclusion that this is not a major increase and that this is possible for the banks to do this. We used it also in the comprehensive assessment, the same criterion, if I'm not mistaken. We used it also in the same criterion, we was used in the comprehensive assessment, so it's not new. Good morning. I'd like to come back briefly on the large exposure exemptions with two questions. One is in substance the criteria for granting the exemptions that are described in pandics. One requires the bank to have a credit risk framework for managing intracope exposure, which is in a sense similar to the framework it would have for third-party exposures. If you could elaborate on the underlying logic of that because it's not very natural, I would say, within a group to consider subsidiaries as third parties. The second question is there are situations like in Belgium where the exemptions have been granted by competent authorities and not by the member states in the law, and we are wondering what those exemptions would become with this new rule. Maybe I can say a couple of words. Maybe you can integrate. The like third parties may look excessive, but the groups have different internal organisations. Some of them are more centralised, maybe yours is one case. Some others are much more of a federal structure, very independent, and the rule has to cater in a prudent way for all the different situations. So that's why, you know, then this is a guide, so the JST will look into it and will make the assessment on the basis of the criteria specification, but it's important that the rule makes sure that the more potentially complicated cases are catered for. This is one. The other one granted by member states. Okay, there are some options, discretion granted by member states, which are fixed terms, so they expire. Some others are permanent, so the ones that they expire when they come to the expiration date will have to be renewed and that will be the ECB based on this package to, you know, to sort of phase in the new regime. The other ones, if they are permanent, then we'll have to look into them and of course we are in contact with the national authorities to identify those specific cases when the package will be enforced, we will make the necessary changes. Maybe on the first part, I couldn't agree more with Ignatio just to reiterate one point, that of course we are only prudential supervisors, we also need to consider the resolution strategy, right, which drives then the level of integration within the group. But like Ignatio said before, this is really a guide, then the JST will consider this, you know, specification in light of the business model of bank, in light of the resolution strategy. So the starting point, as far as I am concerned, can only be really a very prudent credit risk management and consider intergroup exposure like it were for a third part and then it will be adjusted accordingly based on the specific situation of the group. Can you give this gentleman here with the glasses in front with the microphone, please? Yes, good morning, Dominic Adler from the Association of German Banks. I have two questions on the waivers. The first one is on the liquidity waiver. In this CRR it says that the liquidity waiver can be exempting in full or in part all requirements of the liquidity regulation and you interpreted that way that it's not valid for the reporting requirement. And I would take it that in full means in full. That would be the first question. The second one is on waivers in general, even though so far I'm not aware of any waivers you granted for liquidity, but still I take it because it's not in the regulation and rather in the guide that old waivers that are granted as of now stay in force until further notice and have not to be applied for on the 20 days after the publication. Thank you. Well, considering the reporting, I don't know if Giuseppe wants to take it. For us reporting is... Look, we are moving, as I said, a little bit into uncharted territory. We want to open up, but we want to have the right information. So, particularly in case in which we have a more open attitude, I think it's important for us to have the information. So that's why we did not accept the logic that if there is no requirement there's no information. You know, we want to see what's going on. That's basically the rationale. In terms of waivers, I think your question was similar to the previous one, namely when, as I said, if the waiver granted by the National Authority expires, then at expiration will be treated according to the new package. If it is permanent, we'll have to be looked into. It's not that after the 20 days, automatically it expires. We'll have to be looked into and replaced by another decision. And again, on reporting, indeed there is this policy trade-off between being more open and being prudent and conservative, but then in the end, our expectation is that banks would have the data anyway, right? Because we assume and we hope that banks track record of the intra-group exposures even though there is the regulatory waivers. The regulatory waivers is something that might build up on the internal reporting system. So I think that it's really part of the normal practice, I'm not saying best practice, but the normal internal risk management to track record of the intra-group exposures. So I think that this is really... Again, we didn't think that this would create such an additional burden for banks. My suggestion would be if there are waivers that are in place, granted previously, now there is a new regime, that the banks speak to the JSTs, and find together the most reasonable solution to each specific situation. Thomas, do you want to... Yeah, one final argument for the reporting. Liquidity coverage ratio is a new requirement introduced in October 15. It's a new requirement for the banks, but it's also a new requirement for supervisors. So of course it is important that we can monitor this for a period also. Thanks. Jacqueline Mills from the Association for Financial Markets in Europe. I have a question about the future. So you've done a tremendous job of going from about 150 options and discussions to having just 30 or so that still need some further work. But how do you see things going forward as either new level 2 or level 1 texts are produced, and hopefully there will be less discretion and options introduced into those texts, but there probably will need to be some amount. How do you see yourselves tackling this? Will you have regular consultations? Will you update the regulations and the guides? Important point. The first thing I want to say is that you may have seen in one of the sections of the guide that some of the O&Ds are pending. There is more work to be done and so there will be a second train, so to speak, or a second installment of this much smaller than this one. Let me add, we're not going to do another evolution anytime soon, but next year we will look into this small number, quite significant in terms of substance, that we couldn't conclude now and maybe a few others, but not more. And that will be the end of it for the moment. There will not be every year a new option discretion exercise. Now your second question is, I think, more important if there are new level 2 regulation, if the regulation itself changes, what's going to happen? We have seen, perhaps surprisingly, but not so much, is that as the European Banking Regulation becomes more directly applicable, for example, going from the directive to the CRR, to the regulation, it's directly applicable, the number of option discretion increases, does not decrease, because the element of flexibility that is no longer there because of the transposition takes the form of optionality. If this is a trend, I don't know, but if this is a trend in European legislation, I would expect that the legislator, unless they take into account the existence of the SSM, but the legislation looks at Europe as a whole, not and this is a sensitive issue. Unless that happens, I would expect that there will be other options discretion in the future, so we have to look into that, but now I think that we would have bigger shoulders because we have trained ourselves in looking and treating in a consistent way these provisions, so I would anticipate, I would hope that the next steps will be easier. Maybe if I can also complement on this, we are indeed trying to reduce the number of discretion and also in Basel, we have already started to do that. And like Ignacio said, it's very likely that when you discuss the level one text and you follow the debate in Brussels, it's very likely that also in order to strike the compromise or also in order to keep some flexibility then the end result is indeed to have an initial discretion. So of course we cannot determine the final decision by the European institution in Brussels that are responsible for legal one text, but for sure I think that this experience has helped us to detect national discretion and option because we also looked a lot for an official definition on national discretion and we didn't find it. There is only one definition by DBA. So and then it's quite tricky when you have a legal text that looks like a national discretion and it's not. Or maybe it's a different type of national discretion. So for sure we will try to ensure that the national discretion text is clear enough to describe what the competent authority might do and what cannot do because this would help our work a lot based on experience developed so far. Let me take the opportunity to thank AFME for the stimulus and support that we receive from them in a number of occasions. Not only this one. Good morning. I'm Hedy Ben-Maimut from Bank of New York, Mellon. So maybe I'll start with I would like to come back on the largest portion regime and I'll start with a little remark maybe before asking you a small procedure question but I hear what you say in saying that you have a UL mandated basically to bring a level playing field fully understood that in a prudent way of course. And I hear also your remark Giuseppe on the resolution driving a lot of the decisions. That being said and being a systemic bank of course but I wonder to what extent you have factored in the very difference business model that you have in your landscape and especially very different businesses in nature and if I'll take the example of Bank of New York Mellon in Europe it's pretty much a custody business and which has risk profile fundamentally different from what you would have in your universal bank and the exposure are very different in nature. Coming back on the intergroup large exposure piece the regime would put us and always puts us in a situation where basically by the cap that we have on that and the cash upstream we can have to the mother company pushes us of course to develop some items in our balance sheet like investment portfolio which are quite remote actually from our core business and which we don't view necessarily as a decrease of risk from our perspective given that we have to manage all sorts of risk that we don't do usually like interest risk of the banking book or things like that because we are capped by the amount of cash we can upstream to the mother company so that's just one remark so two questions one which has been asked already but I'm not sure understood the response is on the national discretion on the intergroup large exposure regime there is one discretion applied for example in Belgium where we are based in Europe what do they become and maybe it was said but sorry I missed it and second for these aspects of intergroup large exposure and these particular business model and implications there is a menu of criteria of course that you have proposed in term for exemption of this would that menu work as a automatic mechanical menu and with who is our partner for that do we partner with this team or do we interface with the GST the first is a complex question maybe we will ask some support from Chiara because here we are talking about national discretion so the discretion are exercised by the member state now the member state now in some cases the discretion is explicitly member state or competent authority so the member state enters and they exercise in other case they are not maybe some member states with their own legislation just in a sort kind of free way and in both cases there is an issue of consistency with the wealth functioning of the banking union and the maintenance of high level supervisory standards and in some cases there can be there can be an issue there and we mention this in our publication I think also here we mentioned that there is an opinion, a legal opinion of the ECB recently that goes very explicitly into that. So, but of course the law is the law, it's not something for the competent authority. So we have talked to the commission, we are talking to the commission, and they are sensitive to this issue, and I think they, in the fall, we are now doing a little bit of collection of relevant cases for this, in order for the commission to be able to consider an act, and I think they will do something to ensure the well functioning of the banking union. I don't know if you want to... Maybe just to add very briefly, we are again in uncharted territory in the sense that it's the first time ever that a European institution needs to apply national law, and then there are differences in national law, plus what can happen is that the implementation of this directive can also intervene at different times, different stages, and the question that is new, but is very, very important for the future is whether the member states are completely free to go in all directions when they implement, or whether, because this law is now the one that needs to be applied at the European level within the higher objective of having a more harmonized single banking actually union, they would be able to do that within certain constraints, in particular, not to contradict the higher objective, not to go in all direction, but rather to go towards federal harmonization in order to allow the ECB to actually fulfill this mandate. It's new, it was never in court, this type of issue, and it is something indeed that we're discussing with the commission. Ellen, do you have anything to add? Yes, if I may add a brief point on this issue, this discretion of ECB is the fact that it can waive in full or in part this part of CRR. This national discretion comes under this part of CRR, therefore we understand that we can also disregard this national discretion. On the basis of this power of the ECB to waive in full or in part. Maybe on the second one. On the second one, the answer is yes, we have tried to consider all the different business models. I know a little bit your situation also because we are in contact with the non-European authorities as part of our ongoing contact, so I am fully aware personally of the specificities of your business model. So, but of course it's difficult to factor all the different business model. And then like Ignacio said at the beginning, this is really a set of criteria that need to be adjusted on a case by case basis. And then the JST is responsible to assess that. So also to answer your last sub question, who is your counterparty? So we are, the advisory board has developed a proposal for a guide that will be used by the JST. So this does not affect at all the normal ongoing interaction between JST and the bank. So the JST of course will consult with us with the team that has coordinated the work. But in the end the JST will be responsible for the proposal based on the actual specificity of your business model. On the question of insurance holdings, there is in one of the paper a mention that there is an appropriate disclosure review. As you know, banks who are conglomerates are requested through CRR to publish the conglomerate ratio. So my question is, can you confirm that any analysis or change will go through the EC conglomerate directive of 2002? Thank you. You're correct that there is this in article 49, paragraph five, there's a requirement there for the fine cut disclosure. What we are looking in together with the European authority whether it is possible to supplement this in the pillar two guidelines, which will be developed by the EPA. And the details of that, we have not finalized the details of this. But again, I think that as we said, we are very much in close coordination with the EPA. And I think that as you know, the EPA is also planning to review the PILOT 3 package. So we are confident that we can implement the supervisory board proposal to have this enhanced disclosure. And I can also tell you that, of course, this was also part of the discussion in Basel where even though maybe the banks were not required to calculate or to deduct, sorry, to deduct the insurance holding, there was some discussion in order to enhance the disclosure, so at least to help the market to assess the impact of any different treatment. So this really, again, part of the Levenplain field that maybe you were asking for before. So just for the market to understand what would the capital ratio be in case an alternative treatment would be applied? This is a case in which we are not complying with Basel. And one of the few cases in which regretfully we are not able to fix in this package. We remain non-compliant. Although material and non-compliant, although this disclosure thing I think is quite meaningful. Anyway. Here's somebody who hasn't asked a question yet. So then we come to the gentleman who was already there. Thank you very much. It's Michael Lever from Association for Financial Markets in Europe. It's a general question, really. When I look at the regulation, it makes it very clear that in carrying out the ECB carrying out its supervisory task, it should have full regard to diversity, credit institutions, their size and business models, as well as the systemic benefits of diversity in the banking industry of the Union. When I look through the regulation or when I look through the guide, there is only sort of limited areas that one can see where regard is being had to these factors. So my question is how do you actually ensure on the ground consistency of implementation having regard to these particular factors? Because it doesn't really appear to be much guidance either within the regulation or within the guide itself to give one confidence that the ECB will, as a practical matter, be able to take these factors into account in implementing its rules and options and national discretions. I don't know. I think I can try qualitative answer here. Mindful of business models, diversity of business models and systemic benefit for the sector as a whole. This is what you... My impression, maybe I'm too optimistic, is we are doing the benefit of the sector as a whole. Once we are clarifying how all this jungle of provisions will consistently be applied in the SSM. It's a big step in that direction. So I assume that simplification, prudence, openness and all the things that we've already mentioned go precisely in the direction of benefiting the sector. That's my... Maybe I'm too... If you access the EBA website and look at how all the national competitors have applied these 122 national discretions, you will find very interesting fragmentation, I would say. So we hope that this really quite significant contribution to the simplification and to the level and playing field in which the banking sector has been asked to operate. So I think that it's quite a significant achievement. Also, when we went to Basel to introduce this, I've seen that it was very much appreciated. We went to DBA even though we were together. So I think that we always receive a very positive outcome that we are working in the very right direction. Then it goes without saying that we need to improve, we need to... Some people might not agree with each and every policy proposal, but that's part, really, of the process. But I think that I personally believe that we are really going into the right direction. I think... Sorry, can I just come back to that? Sure. Can I come back on that briefly, please? I absolutely agree that a huge amount of work has been done and is in the process being done to ensure consistent treatment amongst the various different options and national discretions. What I'm asking is slightly different. When you get to apply this on the ground and you're looking at different banks and different business models, how do you ensure between those different banks and business models that you apply the option and discretion equally to those and that when the joint supervisory teams have to go out and apply them, there is no particular guidance in either the guide or the regulation on the implementation of the application of the option and discretion, taking account of the differences in business model or diversity of the institutions that are involved? So it's a slightly different question, really. Sorry, I didn't get that properly. But I think that this is really nothing new for DSSM, right? This is what we do on a daily basis in particular in DG4. So I think that, as I said, we already have this type of coordination as we speak, that the JSTs contact the coordination team and DG4, but the implementation of supervisory standards in an harmonized way is really one of the key functions in DSSM and within DSSM is indeed part of the mission of DG4. So we have many tools already in place that try to ensure consistency. So I don't think that there was any need to put that in a guide or in a regulation because it's really part of our core mission. Let me say that this is a much more pervasive issue than in only relation to option discretion. This goes to how you ensure at the same time consistent treatment of all the JSTs, even in the operational modalities of the JSTs, at the same time, adaptation to the specific situation of specific banks of business. There is a natural trade-off there. You have to find the right point in the trade-off. Just wanted to add this, of course, one of the main obligations of ECB as an institution, equal treatment. When you decide you need to treat the counterpart equally and this needs to be done in consideration of their differences. So it is a continuous exercise, as my colleagues are saying, and if anything, this type of guide actually goes in the right direction because it at least establishes a number of criteria that are committing the ECB, committing the JST, and harmonizing further the way in which they operate. The application of the specificities, of course, come on top, but it is anyway a step in the very right direction, I would say. The quality of treatment, other things being equal, but what is equal and what is not. Okay. Thank you. Jens Müller-Meerbach, Ein G-Dieber. I would like to use the opportunity to come back again on 24.2 or page 38 of the guide and in connection with the question raised before, my first question or asking is, could you elaborate on the timeline? So you state that you intend to develop a policy on exercising 24.2 after having assessed the impact, connected with that. Will you also choose the transparency that you used here? So will you publish a guide on how to use 24.2 and connected to that, also connected with a discussion on equal treatment until you have finalized the policy on 24.2 will the JSTs make use of 24.2 or will they not? And my second question on this is just to have a common understanding, exercising 24.2 on certain assets, as you mentioned before, would mean applying IFRS on this certain asset for FinRAAP, CoreRAAP, SNCAMBER and solo reporting, group reporting, pillar one, pillar two, pillar three. So everything connected with regulatory calculations reporting. I don't want to preempt the work of this little group that is now, but let's not bring this out of proportion. We want to, first of all, it may in the end come up that we decide not to exercise this thing. If either it's not very material or it's too difficult to do, if we do something, we will make sure that it is simple enough and feasible enough for everybody to be able to do it. And in that context, I would expect indeed that there may be a little guide, methodologies, et cetera, that makes absolutely crystal clear and feasible for everybody. What we get now from the banks, there's one category of banks that have problems and we are looking into that. It's not a majority. Most of them are just giving the data no problem. And so we see what we can do. Maybe if I can answer it, Nacho, on the second question, what happens until the option has been exercised? So that was your second question. Well, my clear understanding is that the option would be exercised according to the situation before the ECBs. So for example, this is the case in certain member states. For example, Italy has exercised this option. So they will still be placed once it will be exercised or decided on this. Yeah, you can hear him again, Deutsche Börse Group. I have three small issues also on the guideline. First one is with regards to the documentation related to Article 7.1, where you require the signature of the CEO into different subtopics. The concept of CEO is not common throughout Europe. So possibly you should take out this wording and just ask for a competent signature of members of the executive board. The second item goes further down where you talk about liquidity provisions. And you have a provision there in saying, in street times mentioned in different cases, the national liquidity requirements are in place. The credit institution should at least have an LCR for a year. We do not understand the link between the national regulation and the LCR. So the sense of this provision is unclear to us. The third element is with regards to the subcommittees of the supervisory board. You require dedicated to split the boards in an audit and the risk committee if certain conditions are fulfilled. Unfortunately, according to national law, the size of a supervisory board may consist of only three members. And the minimum size of each committee may be three members as well as is the case for Germany. So in just applying, if all the criterion would fulfill, that means that we would have to have three meetings, one for the whole supervisory board, one for an audit committee, and one for the risk committee. It's exactly the same members. So you potentially should put in open clauses with regards to the size of the supervisory board according to national law. Thanks for that. Thanks again for these very important specific points that maybe went out of our net, but still they need to be taken into account. I'm not sure now that it comes to your third point, please write them down again if you can, if you have time. Whether when we say different committees, there's a good reason to have different committees, but what about if the committee is made up of the same people? That's an issue that we need to look into. I would still think that the different committees have different mandates, different accountability and different roles, so even if the people, there is an institutional aspect and it's a personal aspect, so I don't know. Is there a legal, something legal that helps us here? Indeed, there are two different issues, and I take the example, for example, of the SSM regulation where the governing council is in the end taking the decision under an objection procedure, but only in a separate meeting. The people are the same, but we completely separate the two functions because of a different type of accountability, for example. So you could say, well, the identity of the people might not be ideal, but in some situation where, for example, there are only three members, at least the separation of physical times and agendas and procedures is already a better solution than to meddle everything. So I will still see the advantage of having the institutional separation if not the personal separation. But we need to look into that. But we look, of course, I think we need to look into this issue. Any comment on the spot on the other two points or we just look into it? Yeah, I'm coming. What is the documentation, the identification of the CEO, which is not typical in all situations? We can look at that again. I think that, but what we wanted to capture with the CEO was a specific function. If this is not good enough, we will look at that again. So if you have a concrete suggestion, will you look? And the second is the national liquidity requirements in place already. There is a possibility to have that in the facing in period of the LCR. And this is why we tackle this also in the requirements. Sorry, say it again if you can. The requirement is if there is a national thing in place, you can continue to have this until 2018. Agreed. There's also the requirement to report the LCR since 1st of January, 2014. So what is the sense in saying if there is a national thing in place, you have to have at least the LCR for one year. We don't get the sense of this link of the two. We of course agree that there may be a national thing in that we have to report, that's not the point. But what is the purpose of linking the two and requiring if there is national one, then you have to have the LCR for one year and what is then the consequence? It's unclear what the purpose of this concrete combination is. I think we need to look further into this, but for certain the national liquidity requirements might not remind of the LCR here. And the first paragraph of this says that you need to have the LCR in place for one year, but we will look into this. Thanks. Hello, yeah, sorry. Bertrand Rossini from Fringe Banking Federation. A quick question to put into perspective the if next year the TILAC is transposed within the EU legislation. And if, and we hope so, that given that we have a single supervision area in Europe and we have from the first of January 2016 a single resolution area as well. So if this TILAC term sheet is transposed within the EU law, would you then reconsider the treatment for, for instance, intra-cross-border liquidity waiver and as well as large exposure intra-group given that then we would strengthen definitely the to-be-to-fail, the issue of the to-be-to-fail banks and in order to avoid liquidity and capital fragmentation, we would align then, let's say, supervision regulation with the, let's say, the EU TILAC legislation. If I understand correctly, if I understand correctly, the, are we prepared to review what we are saying now in light of the fact that we will have TILAC, MRL regulation in place, single supervision regulation almost complete but not fully complete banking union, et cetera, et cetera. We, in the guide, we plan for a review of the liquidity minimum in 2018, if I remember correctly, that's the plan. And formally speaking, we are not prevented from reviewing this, particularly the guide, the guide that does not need to be consulted. In principle, so minor adjustment can be made, we can do it at any time. Let me just to give a little bit more certainty on the timeframe, we said that in 2019, we will look into this. Yeah, of course, we cannot predict when this will be transposed into the EU law, but for sure, we already put also a reference to the resolution strategy, that if I may, is even more relevant than the transposition of TILAC. Even the TILAC will require some adjustment within the crisis management group, right? So it, again, I think it very much depends on bank specificity of the resolution strategy approved by the crisis management and resolution authorities, because you might have the case where you do not have a single point of entry resolution strategy. So in the end, if there is no single point of entry resolution strategy would be quite difficult or counter-intuitive to allow full movement of liquidity and capital within the group. So again, we already have the placeholder, we already have intellectually and a potential perspective, the reference, the resolution strategy. And I think that the JST will already be able to accommodate that. Last but not least, we are already working with a single resolution board. We are looking at specific situations. So I think it is really part of the ongoing work. And I'm referring to Article 11 of the regulation where you propose a 5% outflow rate for trade finance exposure. Could you elaborate on the basis for this calibration? Really the calibration of something that has already been agreed. We try really to have the same preferential treatment and also not to avoid any disruption for this quite important business. Zero and five. That's fine. Why zero? Why zero? Well, normally, let me tell you. Normally, we've tried to consider the specificity of trade finance. There are a number of points where this pops up. Because when we are aware, I've been in that sector myself in one of my past incarnations. And it's a very competitive market. We compete with Asians. We compete with Americans in this area, et cetera, et cetera. We try to be still prudent but relatively open. In this case, we have this 5%. Maybe we have way more. Yeah, well, there's also an EPA report on the criticality. As you know, I must admit, I don't remember the exact details of this. But I'm certain we looked into how the EPA report looked in this regard also. Let's look again. Yeah, we can look again. Thanks a lot. Perhaps we continue over there because there was the next hand. I know that in one of the previous questions, this issue has been spoke. But I think not exactly in this way. Regarding the guidelines and the decisions already existing decisions, if they are not temporary and they're permanent, has the guideline established a series of criteria and a series of necessary documentation for the decisions, are they already taking decisions going to be revisited? According with the guideline, do you have this in mind? Or this guideline is forward looking and it does not affect to the already decided. No, I think I've already mentioned that there are two types of revisions to be made. One relates to the decisions that we are already making now. We are already using this in order to assess waivers that we receive by the day. But these, of course, decisions are not definitive necessarily because this is not yet approved. So we put provisions in all of these waiver decisions, put a little provision that you can see that says that within 12 months it may be reconsidered in light of the final, the definitive version. That's one thing. The other one is I think the one that we have already discussed earlier is the case in which the national authorities have made a certain decision on what we do. And there, again, we have two possibilities, one whether it is permanent or it's expiring or not. If it does not expire, then we will have to have this dialogue that we mentioned between the JST and the bank and find the right way to treat this eventually in a way that is consistent with provision now. For the liquidity waiver on national level, you are asking for a shred score of at least two. I think using a shred score is kind of difficult because I've never seen such a letter, but I take that the banks do not know the liquidity score. So they don't know if they fulfill these requirements before they apply for the waiver. So my question would be, will banks have, well, can banks ask the ECB what their liquidity shred score is before they apply for the waiver? Or they apply for the waiver and they say yes or no. We will look again at that specific part of our publication. Yes. It's a useful point. It takes a lot. First and last, Mr. Lugarese from Banking Federation. First of all, my understanding of this issue of the existing waivers, let's see if we share the understanding, is that according to the SSM regulation, article I think 150, the decision taken by the authority remain in place. Of course, this doesn't prevent changes also with due respect, in this case, even more forceful of the legitimate expectations. Then one question is regarding two ONDs that are not addressed in your draft documents. And they regard article 113, paragraph 6, the possibility of zero risk weight on infragroup holdings, and also regarding the delegated regulation on LCR, the article 33. I understand that there will be a second package. Mr. Angioloni mentioned it. But if you can say something more on these two, maybe it would be useful. I think the first point, I think technically you are right. So the national decision remains in place until further notice. And I would not consider that an expectation is legitimate to expect that the further notice will never come. It may come. But you are right that there is no solution of continuity, so to speak. So we go on and then we reconsider. On the zero risk weights, we are looking into these things. There is an intragroup dimension to it. There is an IPS dimension to it. There are different things in article 113. And that's part of the additional review that we are making. I don't know if you want to add something on this one. So it will come. So that was indeed the last question. Good. Yeah, thank you very much. Thank you very much for coming and for participating. That leaves me only to wish you a safe, troubled home. You and your families a happy holiday season. And perhaps see you next time for the second training.