Regulatory Alerts2026-01-01
Final Report on Guidelines amending the application of the definition of default under Article 178 of Regulation (EU) No 575/2013
The European Banking Authority issued final guidelines maintaining the 1% net present value threshold for debt restructuring to prevent default misclassification and ensure consistency with other prudential frameworks. The regulator rejected proposals to increase this threshold or shorten probation periods, arguing that such changes would undermine the harmonization of the default definition and hinder efforts to reduce non-performing loans. Additionally, the guidelines update the exceptional treatment for factoring arrangements by increasing the past due days threshold from 30 to 90 and incorporate technical updates required by the CRR3 amendment.
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