Featured Product

    EBA Proposes Standards to Support Secondary NPL Markets

    May 17, 2022

    The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers. The Authority also published a report on the peer review of how prudential and consumer protection authorities supervise the management of non-performing exposures (NPEs) by institutions.

    The draft implementing technical standards are intended to provide a common standard for the NPL transactions across European Union, thus reducing information asymmetries between the sellers and buyers of NPL and enabling cross-country comparison. The definitions of data fields and their characteristics set out in the draft standards would facilitate the sales of NPL on secondary markets, increase efficiency of these markets, and reduce entry barriers for small credit institutions and smaller investors wishing to conclude transactions. The draft standards also set out the requirements for the treatment of confidential information being exchanged between the credit institutions and the buyers as well as governance requirements for the credit institutions to ensure that the information being provided is complete, accurate, and consistent. Along with these standards, EBA has published the common NPL data templates. The draft standards are built around the templates to be used for the provision of loan-by-loan information regarding counterparties related to NPL, contractual characteristics of the loan itself, any collateral and guarantee provided with the associated enforcement procedures, and the historical collection and repayment schedule of the loan. The NPL transaction templates are also complemented by a data glossary and the instructions for filling in the templates. Following the consultation period, the draft standards will be finalized and submitted to the European Commission by the end of 2022.

    The report on peer review assesses how authorities supervise the management of NPEs and have implemented the EBA Guidelines on the management of non-performing and forborne exposures. Overall, the review finds that EBA Guidelines on the management of non-performing and forborne exposures are being applied effectively by both prudential and consumer protection authorities across the European Union. The findings also suggest that the European Union competent authorities have applied a risk-based approach to the supervision of NPE management by the institutions, where the rigor and comprehensiveness of the supervisory review and supervisory resources allocated to these tasks by the authorities is in line with the magnitude of the NPE level in the jurisdiction or institutions. The peer review has not identified any significant concerns regarding the supervision practices but makes some general recommendations for further improvements. The review identified a number of good practices that it recommends the competent authorities to consider applying in their work in relation to NPE management, The peer review also includes recommendations to the EBA to incorporate a number of identified best practices into the Guidelines on management of non-performing and forborne exposures, when these guidelines will be reviewed in the future. 

     

    Related Links

     

    Keywords: Europe, EU, Banking, Credit Risk, NPLS, NPE, Implementing Technical Standards, NPL Templates, Guideline, Forborne Exposures, EBA, Subheadline

    Related Articles
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    News

    FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates

    The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.

    December 20, 2022 WebPage Regulatory News
    News

    FSB Reports Assess NBFI Sector and Progress on LIBOR Transition

    The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.

    December 20, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8697