Regulatory Alerts2021-12-21 | NBB_2021_32Added · Updated
EBA Guidelines on criteria for assessing exceptional cases where institutions exceed large exposure limits and on the timeframe and measures for return to compliance
The EBA establishes criteria for competent authorities to assess exceptional cases where institutions exceed large exposure limits under Article 395(1) of Regulation (EU) No 575/2013 and defines the timeframe and measures for return to compliance. Competent authorities must evaluate breaches based on frequency, predictability, and circumstances beyond the institution's control, generally allowing a maximum return-to-compliance period of three months, extendable to one year only in exceptional justified cases. Institutions exceeding limits must immediately report specific details and, if granted more than three months, submit a detailed compliance plan outlining remedial actions, capital increases, and governance improvements to ensure prompt restoration of compliance.