The European Banking Authority (EBA) has launched a consultation on guidelines on disclosure by credit institutions of information on non-performing and forborne exposures. The guidelines specify the information related to non-performing (NPE) and forborne exposures and foreclosed assets that banks should disclose and provide uniform disclosure formats.
The guidelines apply to credit institutions that are subject to all or part of the disclosure requirements specified in the Capital Requirements Regulation (CRR). These requirements, including the frequency of the disclosure, are applied in a proportionate manner based on the significance of the credit institution and the level of NPEs.
The guidelines include ten disclosure templates, of which four are applicable to all credit institutions and six apply only to significant institutions with a high level of NPEs. Overall, this uniform disclosure is intended to provide meaningful information to market participants on credit institutions' asset quality. In addition, for those institutions with high level of NPEs, the guidelines seek to help gain a better insight into the features and distribution of their problematic assets, the quality and value of their collaterals and the efficiency of their recovery function.
The content of the templates included in the guidelines has been developed in parallel with the amendments to the reporting framework on non-performing exposures, which the EBA will consult on. Although the two consultations will be run separately, the EBA intends to ensure consistency between the disclosure guidelines and the amended FINREP framework.
Comments are due 27 July 2018.