EBA published the final guidelines on disclosure of non-performing and forborne exposures. The guidelines include a set of common templates applicable to all banks and a set of additional templates applicable only to significant credit institutions with a gross non-performing loan (NPL) ratio at a level of 5% or above. The guidelines apply from December 31, 2019.
The guidelines set enhanced disclosure requirements and uniform disclosure formats applicable to credit institutions' public disclosure of information regarding non-performing exposures, forborne exposures, and foreclosed assets. The proportionality principle applies to the guidelines and is based on the significance of the credit institution and the level of non-performing loans. For the credit institutions with a gross NPL ratio at or above 5%, the guidelines aim to provide a better insight on the distribution and features of the institutions' problematic assets, the quality and value of the collaterals, backing them and the efficiency of the institution's recovery function. The guidelines are intended to foster transparency, providing meaningful information to market participants on the quality of credit institutions' assets and to address any potential asymmetries of information in a consistent and comparable way.
EBA is also developing new supervisory reporting requirements on non-performing exposures and these have been developed ensuring full alignment between the disclosure templates (in this guideline) and the supervisory reporting data. The disclosures in these guidelines will allow market participants and stakeholders to have a better picture of the quality of the banks' assets, the main features of their non-performing and forborne exposures, and in the case of more troubled banks, the distribution of the problematic assets and the value of the collateral backing those assets. The guidelines apply to credit institutions that are subject to all or part of the disclosure requirements specified in the Capital Requirements Regulation (CRR).
Effective Date: December 31, 2019
Keywords: Europe, EU, Banking, Non-performing Exposures, NPLs, Disclosure, Proportionality, CRR, EBA
Previous ArticleBCBS Report Examines Cyber Resilience Practices Across Jurisdictions
Next ArticleACPR Publishes Version 2.8.1 of the CRD IV Taxonomy
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.
FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.
ECB published eleventh issue of the Macroprudential Bulletin, which provides insight into the ongoing work of ECB in the field of macro-prudential policy.
HM Treasury issued a call for evidence seeking views to reform the prudential regulatory regime—also known as Solvency II—of the insurance sector in UK.