BDE has published two circulars (3/2020 and 2/2020) that amend Circular 4/2017 for credit institutions on public and confidential financial reporting rules. Circular 3/2020 introduces changes on the credit-risk classification of forborne exposures. Circular 2/2020 increases the reporting requirements of banks in respect of non-performing and forborne exposures and foreclosed collateral, supplements the information on operating and administrative expenses, and incorporates minor changes to the data to be reported on leases as a result of the entry into force of IFRS 16 on leases. The circulars will enter into force the day following their publication in the "Official State Gazette."
In response to COVID-19, Circular 3/2020 is intended to allow greater flexibility in applying expert judgment for the credit-risk classification of forborne exposures. Specifically, the new Circular allows rebuttal of the presumption that the granting of these loans would always result in a significant increase in credit risk. Banks may rebut this presumption and classify the loans as performing, if they consider that there has been no significant increase in credit risk, notwithstanding the requirement that they be identified as forborne exposures for their proper monitoring and risk management. This amendment allows the entities subject to Circular 4/2017 to make greater use of the flexibility in the EBA guidelines on the credit risk management practices of credit institutions and the accounting for expected credit losses (EBA/GL/2017/06).
Circular 2/2020 intends to incorporate changes related to the reporting requirements applicable to credit institutions, which were introduced by the Commission Implementing Regulation 2020/429 and ECB Regulation 2020/605. To comply with the ESRB recommendation on closing real estate data gaps, this circular introduces changes to the information required from credit institutions on (commercial and residential) real estate loans. Circular 2/2020 also incorporates the latest developments in IFRS and other standards adopted or approved by EU, simplifies certain reporting requirements for credit institutions, and updates the information required in the different financial statements.
Related Links (in English and Spanish)
Effective Date: Official Gazette+1 Day
Keywords: Europe, Spain, Banking, COVID-19, Credit Risk, Reporting, NPL, Forborne Exposures, Expected Credit Loss, IFRS 9, IFRS 16, Leases, EBA, ECB, ESRB, EC, BDE
Previous ArticleSebastiano Laviola of SRB Outlines Next Steps for MREL Policy
HKMA has published a circular that sets out the regulatory and reporting treatment for loans that participating authorized institutions may grant to eligible borrowers under the 100% Personal Loan Guarantee Scheme.
ECB published the results of the assessment of internal models that banks use to calculate risk-weighted assets for credit, market, and counterparty credit risks.
PRA published a statement on the regulatory treatment of retail residential mortgage loans under the Mortgage Guarantee Scheme, or MGS.
FCA is consulting, via CP21/7, on the second phase of proposed rules to introduce the UK Investment Firm Prudential Regime (IFPR).
HM Treasury and BoE announced the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential central bank digital currency in UK.
EIOPA published an opinion to set out its expectations on the supervision of the integration of climate change risk scenarios by insurers in their Own Risk and Solvency Assessment (ORSA).
Bundesbank published two circulars on AnaCredit reporting requirements. Circular 27/2021 covers changes to the reporting of branches, additional attributes to be reported for investment funds from August 01, 2021, and updates to the list of international organizations.
EC published the Implementing Regulation 2021/622 that lays down implementing technical standards for reporting of the minimum requirement for own funds and eligible liabilities (MREL).
BCBS has set out the strategic work priorities, as part of its the work program for 2021-22.
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.