EBA Finalizes Guidelines on Disclosure of Non-Performing Exposures
EBA published the final guidelines on disclosure of non-performing and forborne exposures. The guidelines include a set of common templates applicable to all banks and a set of additional templates applicable only to significant credit institutions with a gross non-performing loan (NPL) ratio at a level of 5% or above. The guidelines apply from December 31, 2019.
The guidelines set enhanced disclosure requirements and uniform disclosure formats applicable to credit institutions' public disclosure of information regarding non-performing exposures, forborne exposures, and foreclosed assets. The proportionality principle applies to the guidelines and is based on the significance of the credit institution and the level of non-performing loans. For the credit institutions with a gross NPL ratio at or above 5%, the guidelines aim to provide a better insight on the distribution and features of the institutions' problematic assets, the quality and value of the collaterals, backing them and the efficiency of the institution's recovery function. The guidelines are intended to foster transparency, providing meaningful information to market participants on the quality of credit institutions' assets and to address any potential asymmetries of information in a consistent and comparable way.
EBA is also developing new supervisory reporting requirements on non-performing exposures and these have been developed ensuring full alignment between the disclosure templates (in this guideline) and the supervisory reporting data. The disclosures in these guidelines will allow market participants and stakeholders to have a better picture of the quality of the banks' assets, the main features of their non-performing and forborne exposures, and in the case of more troubled banks, the distribution of the problematic assets and the value of the collateral backing those assets. The guidelines apply to credit institutions that are subject to all or part of the disclosure requirements specified in the Capital Requirements Regulation (CRR).
Related Links
Effective Date: December 31, 2019
Keywords: Europe, EU, Banking, Non-performing Exposures, NPLs, Disclosure, Proportionality, CRR, EBA
Previous Article
CBB Consults on Licensing Rules for Crypto-Asset Platform OperatorsRelated Articles
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA Issues Erratum for Technical Package on Reporting Framework 3.0
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA Publishes Risk Dashboard for Third Quarter of 2020
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB Finalizes Guide on Supervisory Approach to Bank Consolidation
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.
SRB Chair Outlines Work Priorities for 2021
The SRB Chair Elke König published an article setting out work priorities for 2021.
FDIC Selects Companies to Compete in Final Phase of Tech Sprint
FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.
