General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
March 08, 2018

EBA launched a consultation on the guidelines for credit institutions on effectively managing non-performing exposures (NPEs) and forborne exposures (FBEs). The consultation on the guidelines runs until June 08, 2018 and the guidelines are to be implemented by January 01, 2019. EBA also released a video to help the interested stakeholders get familiar with the key features of the two sets of EBA templates on non-performing loans (NPLs) published on December 14, 2017. EBA designed the templates to help restart the secondary markets for NPLs in Europe, thus contributing to the EC action plan (released in July 2017) to tackle NPLs in Europe.

The guidelines are designed to ensure that consumers, who have taken out loans, are treated fairly at every stage of the loan life cycle. The guidelines specify sound risk management practices for credit institutions for managing NPEs and FBEs, looking at the governance and operations of the NPE workout framework, the internal control framework, and the NPE monitoring and early warning processes. The consultation paper seeks views on the threshold for assessing high NPE banks. The consultation paper notes that credit institutions with elevated levels of NPEs, measured as an NPL ratio of 5% or above, should establish the NPE strategy and related governance and operational arrangements. 

The consultation paper also sets out requirements on processes to recognize NPEs and FBEs, along with a forbearance granting process, with a focus on the viability of forbearance measures. The paper suggests that forbearance measures should be granted only when they aim to restore sustainable repayment by the borrower and are thus in the interest of the borrower. Credit institutions are expected to monitor efficiency and effectiveness of forbearance measures and have in place policies and processes to assess borrowers' financial difficulties and identification of NPEs. The paper sets out requirements for competent authorities' assessment of credit institutions' NPE management activity as part of the Supervisory Review and Evaluation Process or SREP.


Related Links

Comment Due Date: June 08, 2018

Effective Date: January 01, 2019

Keywords: Europe, EU, Banking, Guidelines, SREP, Non-Performing Exposures, NPLs, EBA

Related Insights
News

US Agencies Propose Revisions to FFIEC Reports 031, 041, 051, and 101

US Agencies (FDIC, FED, and OCC) propose to extend for three years, with revision, FFIEC 031, FFIEC 041, FFIEC 051, and FFIEC 101.

February 21, 2019 WebPage Regulatory News
News

OFR Adopts Data Collection Rule on Centrally Cleared Repo Transactions

OFR adopted a final rule to establish a data collection covering centrally cleared funding transactions in the U.S. repurchase agreement (repo) market.

February 20, 2019 WebPage Regulatory News
News

FHFA Finalizes Rule on Federal Home Loan Bank Capital Requirements

FHFA published, in Federal Register, the final rule to adopt, as its own, portions of the regulations of the Federal Housing Finance Board pertaining to the capital requirements for the Federal Home Loan Banks.

February 20, 2019 WebPage Regulatory News
News

PRA Publishes PS4/19 on Loss-Absorbency Mechanism Under Solvency II

PRA published a policy statement (PS4/19) that provides feedback on responses to the consultation paper (CP27/18) on adjusting for the reduction of loss absorbency where own fund instruments are taxed on write down under Solvency II.

February 20, 2019 WebPage Regulatory News
News

SRB Publishes Framework for Performing Valuations in Resolution

The framework provides independent valuers and the general public with an indication of the expectations of SRB on the principles and methodologies for valuation reports, as set out in the legal framework.

February 19, 2019 WebPage Regulatory News
News

BIS Paper on Effect of Securities Lending on OTC Market Liquidity

BIS published a working paper that studies how securities lending affects over-the-counter market (OTC) liquidity.

February 19, 2019 WebPage Regulatory News
News

US Agencies Extend Consultation Period for the Proposed SA-CCR

US Agencies (FDIC, FED, and OCC) extended the comment period for a proposed rule to update their standards for how firms measure counterparty credit risk posed by derivative contracts.

February 18, 2019 WebPage Regulatory News
News

FED Extends Consultation Period for Stress Testing Rule

FED has published in the Federal Register a notice proposing amendments to the company run and supervisory stress test rules.

February 15, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Third Update for February 2019

EBA published answers to two questions under the Single Rulebook question and answer (Q&A) updates for this week.

February 15, 2019 WebPage Regulatory News
News

SEC Proposes Rule on Risk Mitigation Techniques for Uncleared SBS

SEC proposed a rule that would require the application of specific risk-mitigation techniques to portfolios of security-based swaps (SBS) that are not submitted for clearing.

February 15, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2623