Featured Product

    Ireland Proposes Materiality Thresholds for Credit Obligation Past Due

    July 04, 2018

    The Central Bank of Ireland published a consultation on the implementation of the Commission Delegated Regulation (EU) 2018/171 (of October 19, 2017) on materiality thresholds for credit obligations past due. This Delegated Regulation supplements Capital Requirements Regulation or CRR (EU Regulation No 575/2013) with regard to the regulatory technical standards on materiality thresholds for credit obligations past due. The consultation closes on August 15, 2018.

    This consultation paper signals the proposed approach of the Central Bank of Ireland in relation to the setting of the threshold for the materiality of a credit obligation past due. Regulation 2018/171 specifies the conditions for setting the materiality threshold for retail and "other than retail" exposures. When establishing the materiality threshold pursuant to its tasks under the regulatory technical standards, the Central Bank of Ireland proposes to set the absolute and relative components of the materiality threshold as follows:

    • An absolute component—For retail exposures the materiality threshold shall be set at EUR 100. For all other exposures the threshold shall be set at EUR 500
    • A relative component set at a ratio of 1% of the amount of the credit obligation past due in relation to the total amount of all on-balance sheet exposures to that obligor of the institution, the parent undertaking of that institution or any of its subsidiaries, excluding equity exposures
    • Both the absolute and relative threshold will apply from December 31, 2020.

    As per Article 178(2)(d) of the CRR, concerning the Default of an Obligor, the materiality of a credit obligation past due shall be assessed against a threshold, defined by the competent authorities. That threshold must reflect a reasonable level of risk. Under Article 178(6), EBA is required to specify the conditions according to which the competent authority shall set the threshold against which the materiality of a credit obligation past due shall be assessed for the purposes of identifying defaults of obligors or individual credit facilities under Article 178. The materiality threshold is applicable for institutions using both the standardized approach and internal ratings-based (IRB) approach for calculation of own funds requirements for credit risk. As is set forth in the regulatory technical standards, the materiality of past due credit obligations forms part of the definition of default in Article 178 (1) (b). In the case of the implementation of these regulatory standards, the Central Bank of Ireland, as national competent authority, has the responsibility for implementation with regard to the Less Significant Institutions within the European banking regulatory framework.

     

    Related Links

    Comment Due Date: August 15, 2018

    Effective Date: December 31, 2020

    Keywords: Europe, Ireland, Banking, Credit Risk, Credit Obligations, CRR, Materiality Threshold, Central Bank of Ireland

    Related Articles
    News

    MAS Amends Notice 610 on Reporting Templates for Banks in Singapore

    MAS published amendments to Notices 610 and 1003 related to submission of statistics and returns, along with the reporting templates and frequently asked questions (FAQs) associated with these Notices.

    January 24, 2020 WebPage Regulatory News
    News

    HKMA Updates Policy Module on Supervisory Review Process

    HKMA is issuing, by notice in the Gazette, revised versions of two Supervisory Policy Manual modules as statutory guidelines under section 7(3) of the Banking Ordinance. The Supervisory Policy Manual modules are CA-G-5 on “Supervisory Review Process” and SB-2 on “Leveraged Foreign Exchange Trading.”

    January 24, 2020 WebPage Regulatory News
    News

    PRA Amends Pillar 2 Capital Framework for Banks

    PRA published the policy statement PS2/20 that contains the final amendments to the Pillar 2 framework and provides feedback to responses to the consultation paper CP5/19 on updates related to Pillar 2 capital framework.

    January 23, 2020 WebPage Regulatory News
    News

    FED Proposes to Revise Information Collection Under Market Risk Rule

    FED proposed to revise and extend, for three years, FR 4201, which is the information collection under the market risk capital rule.

    January 22, 2020 WebPage Regulatory News
    News

    HKMA Consults on Stay Rules on Financial Contracts Under FIRO

    HKMA published proposals for making rules related to contractual stays on termination rights in financial contracts for authorized institutions under FIRO or the Financial Institutions (Resolution) Ordinance (Cap. 628).

    January 22, 2020 WebPage Regulatory News
    News

    MAS Amends Notices on Minimum Liquid Asset Requirements for Banks

    MAS published amendments to Notices 1015, 613, and 649 related to the minimum liquid assets (MLA) requirements.

    January 21, 2020 WebPage Regulatory News
    News

    APRA Publishes Submission on Fintech and Regtech

    APRA published its submission, to the Senate Select Committee, on financial technology and regulatory technology.

    January 21, 2020 WebPage Regulatory News
    News

    OSFI to Implement Operational Risk Capital Rules for Banks in Q1 2022

    OSFI decided to move domestic implementation of the revised Basel III operational risk capital requirements from the first quarter of 2021 to the first quarter of 2022.

    January 20, 2020 WebPage Regulatory News
    News

    ECB Consults on Guideline on Threshold for Credit Obligations Past Due

    ECB published a draft guideline, along with the frequently asked questions (FAQs), on the definition of the materiality threshold for credit obligations past due for less significant institutions.

    January 20, 2020 WebPage Regulatory News
    News

    OSFI Consults on Instruction Guide for Termination of Pension Plan

    OSFI is consulting on draft revisions to the instruction guide for termination of a defined benefit pension plan.

    January 20, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4526