Guidelines amending EBA/GL/2016/07 on the application of the definition of default under Article 178 of Regulation (EU) No 575/2013 (EBA/GL/2026/05)

Circular Letter No. CC/2026/00000023
Mod. 99999924/T – 01/14
Subject: Guidelines amending Guidelines EBA/GL/2016/07 on the application of the definition of default under Article 178 of Regulation (EU) No 575/2013 (EBA/GL/2026/05)

The European Banking Authority (EBA) published, on May 7, 2026, the “Guidelines amending Guidelines EBA/GL/2016/07 on the application of the definition of default under Article 178 of Regulation (EU) No 575/2013 (EBA/GL/2026/05)”, which will enter into force on October 19, 2026. These Guidelines can be consulted on the EBA's respective website (1).

The aforementioned document revises the Guidelines on the application of the definition of default (EBA/GL/2016/07), following the update of the mandate provided for in Article 178, No. 7, of Regulation (EU) No 575/2013, as amended by CRR3.

The final text of the guidelines generally maintains the previously proposed approach. The changes introduced in the final version are limited in nature, notably the extension from 30 to 90 days of the relevant period for handling technical arrears situations, at the individual invoice level, in non-recourse factoring operations. Technical adjustments resulting from CRR3 are also introduced, specifically the elimination of the reference to discretion regarding the 180-day arrears period and the adaptation of the Guidelines to the new wording of Article 178, No. 3, point (d), of the CRR, concerning restructuring measures likely to result in a reduced financial obligation.

On the other hand, no material changes were introduced regarding:

• the 1% threshold for identifying a diminished financial obligation;
• the framework applicable to identifying default situations in the context of credit restructurings.

The Banco de Portugal emphasizes the importance for less significant credit institutions and entities covered by Article 1 of Banco de Portugal Notice No. 11/2014 (hereinafter referred to as “institutions”) to comply with the Guidelines, which must be followed and applied in the context of the current legislation and regulation applicable to them. The Guidelines will be taken into consideration by the Banco de Portugal in interpreting the legal and regulatory provisions applicable to institutions, for the purpose of verifying compliance.

EBA/GL/2026/05 Guidelines:
The EBA amends Guidelines on the definition of default | European Banking Authority https://www.eba.europa.eu/sites/default/files/2026-07/35b162ff-9373-4fdb-87f2-7b775e1c2cfd/Amending%20GL%20on%20Definition%20of%20Default%20%28EBA%20GL%202026%2005%29_PT.pdf