Instruments exchanged with foreign branches of credit institutions

• Question ID: 2018/0016
• Date of publication: 24/01/2018
• Subject matter: Counterparty group structures, Instruments in the scope of AnaCredit, Intercompany loans
• AnaCredit Manual: Part I

Question

Should exposures to foreign branches of financial institutions be reported under the relevant credit institution, or do they need to be reported separately on a branch by branch basis? Those branches are guaranteed by the credit institution, so should those exposures be aggregated at the level of the credit institution?

Answer

Generally, exposures to AnaCredit counterparties in the form of AnaCredit instruments are reported on a granular and unconsolidated basis. In particular, as Section 4.6.5 of Part I of the AnaCredit Manual explains, intracompany loans, where the observed agent acts as the creditor or servicer, are subject to AnaCredit reporting.

Please note that because AnaCredit counterparties are defined at the level of the institutional unit, an institution’s domestic part and its foreign branches constitute distinct counterparties. (For more information, please refer to Section 2.1.3 of Part I of the AnaCredit Manual, which deals specifically with institutional units of credit institutions.) Consequently, those different institutional units are considered to be different counterparties in AnaCredit, despite being part of the same institution (i.e. the same legal entity), and instruments that are exchanged between different counterparties are reported separately to AnaCredit.

In this example, where instruments are exchanged between different institutional units of the same credit institution, the foreign branch with the exposure is reported as the debtor, while the domestic entity (or another foreign branch, if it acts as the creditor) is reported as the creditor.