Version in force , Modified +950 −413§
Amended by Regulation (EU) 2024/1623 32024R1623 on EUR-Lex (external, EUR-Lex) · Regulation (EU) 2024/2987 32024R2987 on EUR-Lex (external, EUR-Lex) · Regulation (EU) 2024/2795 32024R2795 on EUR-Lex (external, EUR-Lex)
Explanation, written by a model and checked against the cited text
The heading and substance of Article 385 changed entirely: the earlier text described an alternative to CVA methods allowing a multiplication factor of 10 for institutions using the Original Exposure Method under Article 282, while the later text sets out a Simplified approach based on meeting conditions in Article 273a(2) or being permitted under Article 273a(4).
The later text introduces a numbered paragraph structure not present before, with paragraph 1 describing the calculation method using risk-weighted exposure amounts referenced to Article 92(4), points (a) and (g), divided by 12,5.
The later text also adds paragraph 2, listing requirements for transactions under Article 382 and treatment of credit derivatives recognised as internal hedges, and paragraph 3, addressing institutions that no longer meet the conditions of Article 273a(2) or (4) by referring to Article 273b.
Cited: Art. 385, v1 (external, EUR-Lex) · Art. 385, v2 (external, EUR-Lex)
v1 is the previous version, v2 this one.
Text from EUR-Lex, before and after
texts differ too much for an inline diff; shown separately
Previous version, in force 9 July 2024 02013R0575-20240709
Article 385 Alternative to using CVA methods for calculating own funds requirements As an alternative to Article 384, for instruments referred to in Article 382 and subject to the prior consent of the competent authority, institutions using the Original Exposure Method as laid down in Article 282 may apply a multiplication factor of 10 to the resulting risk-weighted exposure amounts for counterparty credit risk for those exposures instead of calculating the own funds requirements for CVA risk.
this version, in force 1 January 2025 02013R0575-20250101
Article 385 Simplified approach 1. An institution that meets all of the conditions set out in Article 273a(2) or has been permitted by its competent authority in accordance with Article 273a(4) to apply the approach set out in Article 282, may calculate the own funds requirements for CVA risk as the risk-weighted exposure amounts for counterparty risk for non-trading book and trading book positions, respectively, referred to in Article 92(4), points (a) and (g), divided by 12,5. 2. For the purposes of the calculation referred to in paragraph 1, the following requirements shall apply: (a) only transactions subject to the own funds requirements for CVA risk laid down in Article 382 are subject to that calculation; (b) credit derivatives that are recognised as internal hedges against counterparty risk exposures are not included in that calculation. 3. An institution that no longer meets one or more of the conditions set out in Article 273a(2) or (4), as applicable, shall comply with the requirements set out in Article 273b.