The ECB has launched a public consultation on a draft addendum to its guidance on non-performing loans, under which banks will be expected to provide full coverage for newly classified NPLs. The new rule aims to reinforce guidance with regards to fostering timely provisioning and write-off practices.
The addendum specifies quantitative supervisory expectations for minimum levels of prudential provisions for all exposures that are newly classified as non-performing in line with the EBA definition of 90 days past due, as of 1 January 2018.
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