17- Asset Encumbrance
Effective from 2022-12-27 - Dec 26 2022
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| 17.1 | The disclosure requirement under this section is: Template ENC - Asset encumbrance. | |
| 17.2 | Template ENC provides information on the encumbered and unencumbered assets of a bank. | |
| 17.3 | The definition of “encumbered assets” in Template ENC is different to that under LCR30 for on-balance sheet assets. Specifically, the definition of “encumbered assets” in Template ENC excludes the aspect of asset monetization. Under Template ENC, “encumbered assets” are assets that the bank is restricted or prevented from liquidating, selling, transferring or assigning, due to regulatory, contractual or other limitations. |
| Template ENC: Asset encumbrance |
| Purpose: To provide the amount of encumbered and unencumbered assets. |
| Scope of application The template is mandatory for all banks. |
| Content: Carrying amount for encumbered and unencumbered assets on the balance sheet using period-end values. Banks must use the specific definition of “encumbered assets” set out in the instructions below in making the disclosure. The scope of consolidation for the purposes of this disclosure requirement should be a bank’s regulatory scope of consolidation, but including its securitization exposures. |
| Frequency: Semiannual. |
| Format: Fixed. Banks should always complete columns (a), (b) and (c). Banks should group any assets used in central bank facilities with other encumbered and unencumbered assets, as appropriate. |
| Accompanying narrative: Banks are expected to supplement the template with a narrative commentary to explain (i) any significant change in the amount of encumbered and unencumbered assets from the previous disclosure; (ii) as applicable, any definition of the amounts of encumbered and/or unencumbered assets broken down by types of transaction/category; and (iii) any other relevant information necessary to understand the context of the disclosed figures. |
| a | b | c | |
| Encumbered assets | Unencumbered assets | Total | |
| The assets on the balance sheet would be disaggregated; there can be as much disaggregation as desired | |||
Definitions The definitions are specific to this template and are not applicable for other parts of the Basel framework. Encumbered assets: Encumbered assets are assets that the bank is restricted or prevented from liquidating, selling, transferring or assigning due to legal, regulatory, contractual or other limitations. The definition of “encumbered assets” in Template ENC is different than that under the Liquidity Coverage Ratio for on-balance sheet assets. Specifically, the definition of “encumbered assets” in Template ENC excludes the aspect of asset monetization. For an unencumbered asset to qualify as high-quality liquid assets, the LCR requires a bank to have the ability to monetize that asset during the stress period such that the bank can meet net cash outflows. Unencumbered assets: Unencumbered assets are assets which do not meet the definition of encumbered. Instructions |
| Total (in column (c)): Sum of encumbered and unencumbered assets. The scope of consolidation for the purposes of this disclosure requirement should be based on a bank’s regulatory scope of consolidation, but including its securitization exposures. |