EBF response to Basel Committee Consultative Document:
Guidelines: Prudential treatment of problem assets
definitions of non-performing exposures and forbearance

Publication date: 15 July 2016

Key messages:

• The EBF supports the harmonisation of the definition of non-performing exposures and forbearance to ensure consistency in its application, transparency, and comparability of risk parameters among banks and to improve banking supervision at global level.
• The European banking sector has undertaken significant investments on internal processes and IT infrastructure in order to comply with the recently implemented new definitions of non-performing exposures and forbearance as required by the European Banking Authority (EBA). The EBF therefore advocates for consistency of the Basel Guidelines and the EU rules and for a level playing field at global level.
• Finally, while in general the EBF supports the objective to promote consistency between reporting and supervisory frameworks, it is important to acknowledge that the new definitions introduced by the BCBS are not mandatory for the use in accounting concepts.