Featured Product

    BDE Circular on Significance Threshold of Overdue Credit Obligations

    October 22, 2019

    BDE published Circular 3/2019 to exercise the power conferred by the Capital Requirements Regulation (CRR) to define the threshold of significance of overdue credit obligations. This circular shall enter into force on the twentieth day following that of its publication in the Official State Gazette. Credit institutions shall apply, as of December 31, 2020, the threshold of significance of past due credit obligations established in this circular and shall notify BDE, before December 31, 2019, about the exact date they will start applying it.

    ECB adopted, on November 21, 2018, Regulation (EU) No 2018/1845, on the exercise of the power provided for in Article 178(2)(d) of CRR (Regulation 575/2013) to define the threshold of significance of overdue credit obligations. The provisions of this regulation are applicable exclusively to significant entities under the direct supervision of ECB. There are, however, to date, no provisions regarding the definition of the threshold of significance applicable to the less significant Spanish credit institutions, which are under the direct supervision of BDE. The provisions of Circular 3/2019 shall apply to the entities and groups referred to in sections a) and b) of Standard 2 of the circular, provided they are considered less significant according to Regulation (EU) No 1024/2013.

    For the purposes of Article 178(2)(d) of CRR, credit institutions shall assess the significance of past-due credit obligations past due against the following threshold that consists of two components:

    • A limit expressed as the sum of all amounts of overdue credit obligations that the debtor maintains against the credit institution, its parent company, or any of its subsidiaries equal to EUR 100 (or equivalent amount in the national currency) for retail exposures and EUR 500 (or equivalent amount in the national currency) for exposures other than retail exposures
    • A limit expressed as the amount of the overdue credit obligation in relation to the total amount of exposures to that debtor in the balance of the credit institution, its parent company ,or any of its subsidiaries, excluding equity exposures, equal to 1%

    The BDE Circular 3/2019 specifies that a default shall be deemed to have occurred when both the above-mentioned limits are exceeded for 90 consecutive days.


    Related Link (in Spanish): Circular 3/2019

    Effective Date: Official State Gazette+20 Days

    Keywords: Europe, Spain, Banking, CRR, Credit Risk, Credit Obligations, Materiality Threshold, Circular 3/2019, Regulation 2018/1845, ECB, BDE

    Related Articles
    News

    BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework

    BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework

    July 08, 2020 WebPage Regulatory News
    News

    PRA Statement on Application of Matching Adjustment Amid Crisis

    PRA published a statement to insurers that clarifies the approach to application of the matching adjustment during COVID-19 crisis.

    July 07, 2020 WebPage Regulatory News
    News

    EBA Provides Clarity on Implementation of Certain COVID-19 Policies

    EBA published a report on the implementation of selected COVID-19 policies within the prudential framework for banking sector.

    July 07, 2020 WebPage Regulatory News
    News

    EC Consults on Revision of Network and Information Systems Directive

    EC launched a consultation to revise the network and information systems (NIS) Directive (2016/1148), which was adopted in July 2016 and is the first horizontal internal market instrument aimed at improving the resilience of the EU against cybersecurity risks.

    July 07, 2020 WebPage Regulatory News
    News

    PRA Statement on LIBOR Transition and PRA Resolution-Related Rules

    PRA published a statement that outlines its view on the implications of LIBOR transition for contracts in scope of the “Contractual Recognition of Bail-In” and “Stay in Resolution” parts of the PRA Rulebook.

    July 07, 2020 WebPage Regulatory News
    News

    PRA Issues Updates to Pillar 2A Capital Framework in UK

    PRA published the policy statement PS15/20 to reflect additional resilience associated with higher macro-prudential buffers in a standard risk environment with a reduction in Pillar 2A capital requirements.

    July 06, 2020 WebPage Regulatory News
    News

    BCBS Report Examines Progress on Adoption of Basel III Framework

    BCBS published the eighteenth progress report on implementation of the Basel III regulatory framework in member jurisdictions.

    July 06, 2020 WebPage Regulatory News
    News

    FCA Proposes Guidance to Further Support Consumer Credit Customers

    FCA announced proposals that would provide continued support for certain consumer credit products to users, who are facing a financial impact because of the exceptional circumstances arising from the COVID-19 pandemic.

    July 03, 2020 WebPage Regulatory News
    News

    ACPR Publishes Draft of Taxonomy RAN 1.4.0 for Solvency II Reporting

    ACPR published a draft version of taxonomy RAN 1.4.0_PWD1, along with the related documentation, for Solvency II reporting.

    July 03, 2020 WebPage Regulatory News
    News

    BCBS Amends Guidelines on Sound Management of AML/CFT Risks

    BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).

    July 02, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5445