Regulatory Alerts2019-11-01
Circular 3/2019 of the Bank of Spain defining the materiality threshold for past-due credit obligations
The Bank of Spain issued Circular 3/2019 to establish the materiality threshold for past-due credit obligations for less significant credit institutions under its direct supervision, thereby completing the regulatory framework required by EU Regulation 575/2013. The circular defines materiality based on two components: a fixed monetary limit (100 euros for retail exposures, 500 euros for others) and a relative limit of 1% of total exposures, requiring a default status only when both thresholds are exceeded for 90 consecutive days. Credit institutions must notify the Bank of Spain of their implementation date by December 31, 2019, and fully apply the new threshold by December 31, 2020.
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