Implementing Technical Standard (ITS) on Supervisory Reporting (Forbearance and non-performing exposures)

Status: Adopted and published in the Official Journal

These Implementing Technical Standards (ITS) aim at implementing uniform definitions and reporting requirements for forbearance and non-performing exposures. Harmonised definitions are crucial in addressing questions over the correct valuation of assets in banks’ balance sheets, in particular, the extent of forbearance and the accurate assessment of non performing exposures. These ITS will be part of a broader set of ITS related to supervisory reporting which cover reporting of own-funds and capital requirements (currently under the COREP Guidelines), reporting of financial information (currently under the FINREP Guidelines), reporting on large exposures (currently under the COREP Large Exposures Guidelines) as well as other specific reporting templates on liquidity coverage and stable funding, leverage and asset encumbrance.

EBA issues revised version of some of its technical standards

EBA issues revised version of some of its technical standards

25 July 2014

The European Banking Authority (EBA) published today the updated versions of three final drafts Implementing Technical Standards (ITS) on Asset Encumbrance, Non-Performing Exposures and Forbearance, and Additional Monitoring Metrics for Liquidity. The three versions published today substitute those previously issued on the same topics.

The updated versions of the ITS on Asset Encumbrance and Non-performing exposures and Forbearance remove data point definitions and validation rules from the ITS on supervisory reporting of institutions submitted to the European Commission (which is now published in the Official Journal of the EU as Regulation (EU) No 680/2014) by introducing an additional text in those ITS that have not yet been adopted by the Commission.

In addition, the standards on Additional Monitoring Metrics (AMM) have undergone minor formatting changes which were necessary to ensure a correct transposition into the DPM/taxonomy format and to ensure consistency with the main provisions of the ITS on supervisory reporting. Additionally, some incorrect legal references were rectified and some clarifications added. Here is an overview of the main changes:

  • Format changes needed for the development of the DPM/Taxonomy (identification of templates, columns and rows used in the DPM);
  • Deletion of some provisions which were inconsistent with the main instructions of the ITS (precision, treatment of cells without content, use of "Of which");
  • Additional specifications needed for reporting amounts;
  • Inconsistencies between templates and instructions, especially in terms of labels or missing explanations;
  • Correction of legal references and general clarifications.

For the sake of transparency, the EBA also published a track-changes version of the Annexes of the ITS on Additional Monitoring Metrics for Liquidity. The Data Point Model and the set of validation rules applicable to the set of AMM templates will be publicly available on the EBA website shortly.

Legal basis and next steps

The EBA is required, among others, to develop implementing technical standards specifying supervisory reporting in the area of encumbrance of assets for institutions (Articles 99(5) and 100 of Regulation (EU) No 575/2013); additional monitoring metrics (Articles 415(3)(b) of Regulation (EU) No 575/2013) and non – performing exposures (Article 99(5) Regulation (EU) No 575/2013).

Press contacts:

Ms. Franca Rosa Congiu

Mr. Ian Edward Palombi

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772

EBA publishes final draft technical standards on NPLs and Forbearance reporting requirements

EBA publishes final draft technical standards on NPLs and Forbearance reporting requirements

21 October 2013

The European Banking Authority (EBA) released today its final technical standards on supervisory reporting on Non-Performing Exposures and Forbearance, which will provide consistent indicators of asset quality of banks across the European Union. The EBA also issued recommendations on asset quality reviews (AQRs) aimed at supporting existing and/or planned reviews across the EU.

Final draft technical standards on Non-Performing Exposures and Forbearance

The standards on Non-Performing Exposures and Forbearance provide common definitions and reporting templates to allow supervisors to assess the level of forbearance activities and non-performing loans on a comparable basis across the EU.

More harmonised asset quality reviews, based on more comparable data, will help address uncertainties around EU banks' asset quality in the current context, and will support on-going and future monitoring of levels and changes in asset quality.

The proposed definitions of non-performing and forbearance exposures rely on the existing concepts of default and impairment but provide for specific harmonisation features. In particular, the definition of non performing exposures focuses on a 90-day past due threshold, while the definition of forbearance focuses on concessions extended to debtors who face, or may face, difficulties in meeting payments. Forborne exposures can be identified in both the non-performing and the performing portfolios. 

These definitions apply to all loans and debt securities that are on balance sheets, except for those held for trading, as well as to some off-balance sheet exposures.

The final standards will be sent to the European Commission for their adoption as EU Regulations that will be directly applicable throughout the EU.

Recommendations on AQRs

The EBA also issued recommendations to competent authorities for their existing and/or planned work on asset quality reviews (AQRs) across the European Union, including the work of the Single Supervisory Mechanism (SSM) and its balance sheet assessment. The aim of these recommendations is to contribute to a coordinated approach in the way competent authorities evaluate banks' credit portfolios.

In particular, for the purpose of the asset quality review, the EBA recommends competent authorities to apply, to the extent possible, the common definitions on "non-performing exposures" and "debt forbearance" published today.

Competent authorities should complete their respective AQRs by 31 October 2014 and report to the EBA, in due time, the preliminary outcomes so as to ensure they can be taken into account and support the next EU-wide stress test.

 

Press contacts:

Ms. Franca Rosa Congiu

Mr. Ian Edward Palombi

E-mail: press@eba.europa.eu - Tel: +44 (0) 207 382 1772