Question ID
2025_7529
Legal act
Regulation (EU) No 575/2013 (CRR)
Topic
Credit Risk – Non performing exposures / loan origination
Article
47 c
Paragraph
a
Subparagraph
i
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
EBA/GL/2018/06 - Guidelines on management of non-performing and forborne exposures
Article/Paragraph
none
Name of institution / submitter
SFIL
Country of incorporation / residence
FRANCE
Type of submitter
Credit institution
Subject matter
factor to apply to non performing exposures to which a risk weight is 0% in a performing situation for the purpose of calculating the amount of unsufficient coverage
Question

is it possible to consider that the derogation applied to the part of the non-performing exposure guaranteed or counter-guaranteed by an eligible protection provider referred to in Article 201(1), points (a) to (e), the unsecured exposures to which would be assigned a risk weight of 0 % under Part Three, also applies to unsecured exposures themselves when assigned a risk weight of 0% ?

Background on the question

Prudential provisioning supplements accounting coverage to account for the impact of the passage of time on loss risk. Article 47c (a)(i) states that when an exposure is secured by an exposure with a risk weight of 0%, the loss risk does not increase over the first 7 years of default. We understand that this relies on the guarantor's ability to meet the debtor's obligations, and that the final loss would remain negligible. Based on this assumption, the same treatment could be applied to exposures weighted at 0% themselves. In other words, a factor of 0 could be applied to non performing exposures that would be weighted 0% in a non-default situation.

Submission date
Rejected publishing date
Rationale for rejection

This question has been rejected because the issue it raises is beyond the remit of the Q&A process and as such it cannot be addressed via a Q&A. 

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Status
Rejected question