General Information & Client Services
  • 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
October 04, 2017

ECB launched a public consultation on a draft addendum to the ECB guidance on non-performing loans (NPLs). The addendum supplements the guidance that was published on March 20, 2017 and reinforces the guidance with regard to fostering timely provisioning and write-off practices. The addendum, which accompanies a set of frequently asked questions (FAQ) on the addendum, sets out supervisory expectations for the minimum levels of prudential provisioning for new NPLs. Consultation period ends on December 08, 2017.

The draft addendum specifies quantitative supervisory expectations for minimum levels of prudential provisions for new NPLs. The prudential provisioning expectations will apply to all exposures that are newly classified as non-performing, in line with the EBA definition as of January 01, 2018. These take into account the length of time a loan has been non-performing and the extent and valuation of collateral. Banks are expected to provide full coverage for the unsecured portion of new NPLs after 2 years at the latest and for the secured portion after 7 years at the latest. Furthermore, banks are expected to explain any deviation from the guidance to supervisors. Based on a bank's explanations, ECB will assess the need for additional supervisory measures.

It is proposed that the draft addendum will be applicable to new NPLs. With regard to NPL stocks, ECB Banking Supervision has required banks with high levels of NPLs to submit NPL strategies, including their NPL reduction targets, in the first half of this year. Many banks have made notable progress and submitted credible strategies including reduction plans. However, some banks still need to improve. ECB Banking Supervision will continue to closely monitor progress on reducing NPLs, provisioning for NPL stocks, and developments with respect to NPL strategies. By the end of the first quarter of 2018, ECB Banking Supervision will present its consideration of further policies to address the existing stock of NPLs, including appropriate transitional arrangements.

 

Related Link: Consultation, FAQ, and Reference Documents (PDF)

Comment Due Date: December 08, 2017

Keywords: Europe, EU, Banking, NPLs, Guidance, Addendum, FAQ, ECB

Related Insights
News

EBA Single Rulebook Q&A: First Update for November 2018

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

November 09, 2018 WebPage Regulatory News
News

FED Finalizes the Large Financial Institution Rating System

FED finalized the new supervisory rating system for Large Financial Institutions (LFIs), to better align with the current supervisory programs and practices for these firms.

November 09, 2018 WebPage Regulatory News
News

ECB Publishes Guides for Capital and Liquidity Management by Banks

ECB published the guides for capital and liquidity management by banks in EU.

November 09, 2018 WebPage Regulatory News
News

EC Amends Regulation on Prudent Valuation for Supervisory Reporting

EC published the amended Implementing Regulation (EU) 2018/1627 on prudent valuation for supervisory reporting. Regulation 2018/1627 amends the Implementing Regulation 680/2014.

November 09, 2018 WebPage Regulatory News
News

FED Intends to Publish the Financial Stability Report in November 2018

FED intends to begin publishing a semiannual report presenting its view of the outlook for U.S. financial stability, on November 28. The financial stability report will include a summary of the FED framework for assessing the resilience of the financial system in the United States.

November 09, 2018 WebPage Regulatory News
News

ESMA Asks Clients of CRAs and TRs to Prepare for No-Deal Brexit

ESMA issued a public statement to raise awareness, among the market participants, on the readiness of credit rating agencies (CRAs) and trade repositories (TRs) for the possibility of no agreement being reached in the context of the United Kingdom withdrawing from the European Union (Brexit).

November 09, 2018 WebPage Regulatory News
News

EIOPA Publishes Result of the Work of EU-US Insurance Dialog Project

EIOPA published four papers resulting from the work of the EU–U.S. Insurance Dialog Project (EU-U.S. Project) in 2018.

November 08, 2018 WebPage Regulatory News
News

EIOPA Publishes Q&A on Regulations in November 2018

EIOPA published new sets of questions and answers (Q&A) on implementing and delegated regulations applicable to insurers in Europe.

November 07, 2018 WebPage Regulatory News
News

APRA Finalizes CPS 234 to Help Combat Threat of Cyber Attacks

APRA has released the final version of its prudential standard focused on information security management.

November 07, 2018 WebPage Regulatory News
News

EC Updates Rule on Forms and Templates for Resolution Plans by Banks

EC finalized the Implementing Regulation (EU) 2018/1624 that lays down implementing technical standards on procedures and standard forms and templates for the provision of information for the purposes of resolution plans for credit institutions and investment firms.

November 07, 2018 WebPage Regulatory News
RESULTS 1 - 10 OF 2192