ARTICLE
19 February 2018

EU Delegated Regulation On Materiality Thresholds For Credit Obligations Past Due

SS
Shearman & Sterling LLP

Contributor

Our success is built on our clients’ success. We have a long and distinguished history of supporting our clients wherever they do business, from major financial centers to emerging and growth markets. We represent many of the world’s leading corporations and major financial institutions, as well as emerging growth companies, governments and state-owned enterprises, often working on ground-breaking, precedent-setting matters. With a deep understanding of our clients' businesses and the industries they operate in, our work is driven by their need for outstanding legal and commercial advice.
On February 6, 2018, a Commission Delegated Regulation on Regulatory Technical Standards for the materiality threshold for credit obligations past due was published in the Official Journal of the European Union.
European Union Finance and Banking

On February 6, 2018, a Commission Delegated Regulation on Regulatory Technical Standards for the materiality threshold for credit obligations past due was published in the Official Journal of the European Union. The Delegated Regulation supplements the Capital Requirements Regulation with regard to the conditions for use of the internal ratings-based approach. The CRR risk quantification provisions set out that a default occurs when an obligor is past due more than 90 days on any material credit obligation to a firm, its parent or any of its subsidiaries. The materiality of the credit obligation is to be assessed against a threshold set by the national regulator according to its view of a reasonable level of risk. The European Banking Authority was obliged to prepare draft RTS specifying the conditions for setting that threshold by a national regulator.

The Delegated Regulation sets out those conditions for retail exposures and for exposures other than retail exposures as well as providing for notification of materiality thresholds to the EBA, the updating of the thresholds and the applicable date for thresholds.

The Delegated Regulation applies from May 7, 2018.

The Delegated Regulation is available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R0171&from=EN&_sm_au_=iVVt05sJZkpNWMWN.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More