ECB published the final addendum to the ECB Guidance to banks on non-performing loans (NPLs), which reflects comments received during public consultation. ECB also published the detailed comments submitted by stakeholders and a feedback statement setting out its consideration of those comments. The addendum specifies the supervisory expectations of ECB for prudent levels of provisions for new NPLs. The addendum is non-binding and will serve as the basis for supervisory dialog between the significant banks and the ECB Banking Supervision.
The addendum supplements the qualitative NPL guidance of ECB, which was published on March 20, 2017, and addresses loans classified as NPLs in line with the EBA’s definition after April 01, 2018. The ECB expectations in this addendum serve as starting point for the supervisory dialog. During the supervisory dialog, ECB will discuss, with each bank, divergences from the prudential provisioning expectations laid out in the addendum. After this dialog and taking into account a bank’s specific situation, ECB Banking Supervision will decide, on a case-by-case basis, whether and which supervisory measures are appropriate. The result of this dialog will be incorporated, for the first time, in the 2021 Supervisory Review and Evaluation Process (SREP). Banks are advised to use this time to prepare themselves and to review their credit underwriting policies and criteria to reduce the production of new NPLs.
- Press Release
- Final Addendum on NPLs (PDF)
- Feedback Statement (PDF)
- Comments Received on Addendum
- Consultation on Addendum to ECB Guidance
Keywords: Europe, EU, Banking, NPLs, Addendum, Responses to Consultation, SREP, ECB
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
EBA published the annual report on asset encumbrance of banks in EU.
MAS revised the guidelines that address technology and cyber risks of financial institutions, in an environment of growing use of cloud technologies, application programming interfaces, and rapid software development.
FED updated the reporting form and instructions for the FR Y-9C report on consolidated financial statements for holding companies.
EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.