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EU Delegated Regulation on Materiality Thresholds for Credit Obligations Past Due
02/06/2018A Commission Delegated Regulation on Regulatory Technical Standards for the materiality threshold for credit obligations past due has been 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.
View the Delegated Regulation.
Financial Regulatory Developments Focus