Incorrect Measure Used For HC-H Line Item 1. BHCK3197 (FRY9C)
(Doc ID 2704801.1)
Last updated on AUGUST 31, 2020
Applies to:Oracle Financial Services - Regulatory Reporting for US Federal Reserve - Lombard Risk Integration Pack - Version 8.0.9 and later
Information in this document applies to any platform.
Line item 1 , MDRM BHCK3197
REG REp USFED 80950
Issue : The requirement for HC-H Line Item 1 (BHCK3197) is to report the balance of interest earning assets. Fed Instructions state: “Earning assets generally include interest-bearing balances due from depository institutions, securities, federal funds sold and securities purchased under agreements to resell, and loans and leases. Assets in these categories that are in non accrual status should be excluded from earning assets”
OFSAA logic is using the measure N_EOP_BAL_RCY and N_FAIR_VALUE_RCY to report this line item.
While the Fed instructions do not explicitly say which balance must be used, it might be reasonable to assume that the balance sheet amount is expected and hence this line item should have the other balance fields used while reporting balances on HC-C / HC-B.
As loans and securities under GAAP are reportable at Amortized cost and leases are reportable at Net investment, the usage N_EOP_BAL_RCY for reporting HC-H line 1 this line item does not seem correct. The balance/measure getting reported on this line item should be more aligned to the way it is used in RC-C for reporting loans and RC-B for reporting securities.
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