Regulatory Alerts2012-02-29
Circular 2/2012 of the Bank of Spain modifying Circular 4/2004 on financial information standards and financial statement models
The Bank of Spain issues Circular 2/2012 to modify Circular 4/2004, implementing additional provisioning and capital requirements for credit entities stemming from Royal Decree-Law 2/2012 regarding real estate-linked assets. The regulation mandates specific coverage percentages for non-performing real estate exposures existing as of December 31, 2011, and introduces a one-time 7% coverage requirement for general real estate financing balances from that date. Furthermore, it updates risk classification criteria, reporting templates, and accounting registers to enhance supervisory oversight of the financial sector's real estate exposure.
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