Featured Product

    EBA Seeks Views on Revisions to Nonperforming Loan Data Templates

    May 04, 2021

    EBA published a discussion paper on review of the standardized nonperforming loans (NPL) transaction data templates, along with the proposed revised NPL data templates. EBA is improving the NPL data templates as a key action in facilitating sales of NPLs and the functioning of the secondary markets for NPLs. The NPL templates are being streamlined to help banks better prepare as part of their NPL management strategies in the aftermath of the COVID-19 pandemic, while addressing information asymmetries to promote price discovery between buyers and sellers. The comment period on this discussion paper ends on August 31, 2021 and EBA expects to published the revised version of the data templates by December 2021.

    With this consultation, EBA opens a discussion with market participants on a number of aspects of the templates such as the design, data fields to be included, and their criticality and availability. The discussion paper proposes a number of changes to the existing templates, such as restructuring of the data categories, design of asset classes, reduction of data fields, and categorization of these data fields as critical and non‐critical, and presents proportionality considerations. The revised templates, as presented in this discussion paper, reduce the number of data fields to 230 from 462 in the existing version of the templates and reduce the number of critical cells from 155 to a range of 30–70 (depending on the asset class). Data fields cover the same seven asset classes of the existing version of the templates. In addition to these changes, the 17 data categories in the existing version of the templates have been reduced and restructured into the following five templates to simplify their use for market participants: 

    • Counterparty template covers information on counterparty group and the counterparty.
    • Relationship template merges, in a single template, any relationship, such as borrower‐loan, tenant‐lease, and guarantor‐guarantee, that the contractual agreement may imply. The template also indicates the relationship between contractual agreement and any property or non‐property collateral.
    • Financial instrument template merges data on financial instrument for loan and lease contracts as well as any forbearance information applicable.
    • Collateral and enforcement template covers data on any property and non‐property collateral related to contractual agreement on the financial instrument as well as any relevant information on the enforcement procedures that may apply to collateral.
    • Collection and repayment template covers information on external collection and historical collection and repayment schedule related to the financial instrument. Certain data fields with respect to the payment schedule require information for the next 36 months while data fields related to historical balances require information on payment history for the past 36 months.

    Annexes to the discussion paper contain templates and instructions for NPL data, present data dictionary, and explain changes with respect to the existing version of the NPL data templates. The proposed revisions to the templates are based on the user experience and feedback from various market participants and are in response to the December 2020 communication from EC on tackling NPLs in the aftermath of the COVID-19 crisis. The revisions will enable price discovery in a consistent way across the single market. EBA will await the finalization of the draft Directive on credit servicers, credit purchasers, and the recovery of collateral. In case the final version of that Directive mandates EBA to develop implementing technical standards specifying data templates for provision of information from NPL sellers to purchasers, EBA will later issue a consultation paper on the draft standards, with the revised templates developed following this discussion paper forming the basis of this consultation paper. 

     

    Related Links

    Comment Due Date: August 31, 2021

    Keywords: Europe, EU, Banking, NPL, COVID-19, Credit Risk, Reporting, Templates, Secondary Market for NPLs, EBA

    Featured Experts
    Related Articles
    News

    APRA Issues Interim Update to Policy Priorities for 2021 and Beyond

    In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.

    September 24, 2021 WebPage Regulatory News
    News

    EBA Publishes Single Rulebook Q&A, Launches Transparency Exercise

    The European Banking Authority (EBA) published answers to 29 questions in the Single Rulebook Question and Answer (Q&A) tool in September.

    September 24, 2021 WebPage Regulatory News
    News

    EC Adopts Solvency II and Resolution Rules Package for Insurers

    The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.

    September 22, 2021 WebPage Regulatory News
    News

    OCC Issues Booklets on Regulatory Reporting and Earnings

    The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.

    September 22, 2021 WebPage Regulatory News
    News

    ECB Sets Out Results of Economy-Wide Climate Stress Tests

    The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.

    September 22, 2021 WebPage Regulatory News
    News

    EBA Examines Implications of Increasing Use of Digital Platforms in EU

    The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.

    September 21, 2021 WebPage Regulatory News
    News

    HKMA Issues Updates on Policy Measures Intended to Ease COVID Impact

    The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.

    September 21, 2021 WebPage Regulatory News
    News

    ISDA Responds to BCBS Proposal on Treatment of Cryptoasset Exposures

    The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.

    September 21, 2021 WebPage Regulatory News
    News

    BIS Quarterly Review Discusses Developments in Fintech and ESG Space

    BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.

    September 20, 2021 WebPage Regulatory News
    News

    BCBS to Consult on Supervisory Practices for Climate Risks by Year-End

    The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards

    September 20, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7495