Featured Product

    EBA Seeks Views on Revisions to Nonperforming Loan Data Templates

    May 04, 2021

    EBA published a discussion paper on review of the standardized nonperforming loans (NPL) transaction data templates, along with the proposed revised NPL data templates. EBA is improving the NPL data templates as a key action in facilitating sales of NPLs and the functioning of the secondary markets for NPLs. The NPL templates are being streamlined to help banks better prepare as part of their NPL management strategies in the aftermath of the COVID-19 pandemic, while addressing information asymmetries to promote price discovery between buyers and sellers. The comment period on this discussion paper ends on August 31, 2021 and EBA expects to published the revised version of the data templates by December 2021.

    With this consultation, EBA opens a discussion with market participants on a number of aspects of the templates such as the design, data fields to be included, and their criticality and availability. The discussion paper proposes a number of changes to the existing templates, such as restructuring of the data categories, design of asset classes, reduction of data fields, and categorization of these data fields as critical and non‐critical, and presents proportionality considerations. The revised templates, as presented in this discussion paper, reduce the number of data fields to 230 from 462 in the existing version of the templates and reduce the number of critical cells from 155 to a range of 30–70 (depending on the asset class). Data fields cover the same seven asset classes of the existing version of the templates. In addition to these changes, the 17 data categories in the existing version of the templates have been reduced and restructured into the following five templates to simplify their use for market participants: 

    • Counterparty template covers information on counterparty group and the counterparty.
    • Relationship template merges, in a single template, any relationship, such as borrower‐loan, tenant‐lease, and guarantor‐guarantee, that the contractual agreement may imply. The template also indicates the relationship between contractual agreement and any property or non‐property collateral.
    • Financial instrument template merges data on financial instrument for loan and lease contracts as well as any forbearance information applicable.
    • Collateral and enforcement template covers data on any property and non‐property collateral related to contractual agreement on the financial instrument as well as any relevant information on the enforcement procedures that may apply to collateral.
    • Collection and repayment template covers information on external collection and historical collection and repayment schedule related to the financial instrument. Certain data fields with respect to the payment schedule require information for the next 36 months while data fields related to historical balances require information on payment history for the past 36 months.

    Annexes to the discussion paper contain templates and instructions for NPL data, present data dictionary, and explain changes with respect to the existing version of the NPL data templates. The proposed revisions to the templates are based on the user experience and feedback from various market participants and are in response to the December 2020 communication from EC on tackling NPLs in the aftermath of the COVID-19 crisis. The revisions will enable price discovery in a consistent way across the single market. EBA will await the finalization of the draft Directive on credit servicers, credit purchasers, and the recovery of collateral. In case the final version of that Directive mandates EBA to develop implementing technical standards specifying data templates for provision of information from NPL sellers to purchasers, EBA will later issue a consultation paper on the draft standards, with the revised templates developed following this discussion paper forming the basis of this consultation paper. 

     

    Related Links

    Comment Due Date: August 31, 2021

    Keywords: Europe, EU, Banking, NPL, COVID-19, Credit Risk, Reporting, Templates, Secondary Market for NPLs, EBA

    Featured Experts
    Related Articles
    News

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News
    News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News
    News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News
    News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News
    News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News
    News

    BaFin Consults on Resolvability Requirements for Resolution Planning

    The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.

    June 10, 2022 WebPage Regulatory News
    News

    EBA Consults on Certain Standards and Guidelines Under CRR and BRRD

    The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.

    June 08, 2022 WebPage Regulatory News
    News

    OJK Publishes Regulatory Updates for Financial Sector Entities

    The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)

    June 03, 2022 WebPage Regulatory News
    News

    EU Publishes Rules on DLT and Data Governance

    The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).

    June 03, 2022 WebPage Regulatory News
    News

    EBA Publishes Phase 2 of Reporting Framework 3.2

    The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications

    June 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8267