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
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
EBA Updates Lists of Entities for Use in Capital Calculations under SA
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS Amends Notice on Related Party Transactions of Banks
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB Amends Guideline on Euro Short-Term Rate
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA Consults on Standards Related to FRTB-SA
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA Proposes Rules Related to IRB Approach for Credit Risk
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
EU Amends CRR and Securitization Regulation in Response to Pandemic
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).