Regulatory Alerts2025-12-10
Guideline (EU) 2025/2595 on the supervisory approach to coverage of non-performing exposures held by less significant supervised entities
The European Central Bank issues this Guideline to establish a harmonized supervisory approach for National Competent Authorities regarding the coverage of non-performing exposures held by less significant supervised entities. It mandates that authorities assess provisioning policies and asset treatment against specific regulatory thresholds, requiring detailed data reporting from institutions to ensure consistent high supervisory standards. The framework includes transitional arrangements with phased coverage factors from 2025 to 2028 and allows for exemptions under specific conditions such as low NPE ratios or ongoing wind-down processes.
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