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ARTICLE · 19 FEBRUARY 2018

EU Delegated Regulation On Materiality Thresholds For Credit Obligations Past Due

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On February 6, 2018, a Commission Delegated Regulation on Regulatory Technical Standards for the materiality threshold for credit obligations past due was published in the Official Journal of the European Union.

European UnionFinance and Banking
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On February 6, 2018, a Commission Delegated Regulation on Regulatory Technical Standards for the materiality threshold for credit obligations past due was published in the Official Journal of the European Union. The Delegated Regulation supplements the Capital Requirements Regulation with regard to the conditions for use of the internal ratings-based approach. The CRR risk quantification provisions set out that a default occurs when an obligor is past due more than 90 days on any material credit obligation to a firm, its parent or any of its subsidiaries. The materiality of the credit obligation is to be assessed against a threshold set by the national regulator according to its view of a reasonable level of risk. The European Banking Authority was obliged to prepare draft RTS specifying the conditions for setting that threshold by a national regulator.

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