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

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News
    News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News
    News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News
    News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News
    News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News
    News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News
    News

    DNB Publishes Multiple Reporting Updates for Banks

    DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.

    February 28, 2023 WebPage Regulatory News
    News

    NBB Sets Out Climate Risk Expectations, Issues Reporting Updates

    The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting

    February 24, 2023 WebPage Regulatory News
    News

    EBA Updates Address Securitization Standards and DGS Guidelines

    The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.

    February 21, 2023 WebPage Regulatory News
    News

    FSB Publishes Letter to G20, Sets Out Work Priorities for 2023

    The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023

    February 20, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8793