CRD IV: Large Exposures Solution

CRD IV defines exposures greater than 10% of the institutions resource. Financial institutions must report on exposures that fit the description. Large exposure requirement involves complex calculations such as Concentration risk capital component, where firms must interpret into their systems. Calculations require large amounts of data from various sources, counterparty reference data can present a challenge of significant data normalization due to a different set up. Once financial institutions compute the large exposures and concentration risk thy must report to the regulator through Common Reporting (COREP), using the EBA’s XBRL taxonomy.