Circular CSSF 20/751 is a CSSF circular, published 7 October 2020. Subject: Adoption of the Guidelines of the European Banking Authority on management of non-performing and forborne exposures (EBA/GL/2018/06), disclosure of non-performing and forborne exposures (EBA/GL/2018/10).
\nRelevant for: Credit institutions.
\nKeywords: Accounting, Credit risk, Risk management.
\nGUIDELINES OF THE EUROPEAN BANKING AUTHORITY ON MANAGEMENT OF NONPERFORMING AND FORBORNE EXPOSURES (EBA/GL/2018/06) AND ON DISCLOSURE OF NONPERFORMING AND FORBORNE EXPOSURES (EBA/GL/2018/10
\nAMENDED BY EBA/GL/2022/13)
\nCircular CSSF 20/751 as amended by Circular CSSF 23/830 Re: Application of the Guidelines of the European Banking Authority on management of non-performing and forborne exposures (EBA/GL/2018/06) and on disclosure of non-performing and forborne exposures (EBA/GL/2018/10 amended by EBA/GL/2022/13).
\nLuxembourg, 25 September
\nLadies and Gentlemen,
\n2020 To all credit institutions and
\nbranches
\nLuxembourg of
\ncredit
\ninstitutions having their registered office in a third country
\nThe purpose of this Circular is to draw your attention to the following two guidelines of the European Banking Authority (EBA), namely EBA/GL/2018/06 on the management of non-performing and forborne exposures and EBA/GL/2018/10 (amended by the EBA/GL/2022/13) on the disclosure of non-performing and forborne exposures. The CSSF, as competent authority, has integrated those guidelines into its administrative practice and regulatory approach with a view to promote supervisory convergence in this field at European level and hence expects supervised entities1 to duly comply with the Guidelines as explained below. Over the past decades, the level of non-performing loans (NPL) and forborne exposures remained very contained in Luxembourg, notwithstanding a higher level in the European Union, especially in some jurisdictions. Nevertheless, in a context of macroeconomic uncertainties which may have a structural effect on the economic activity of borrowers, the CSSF expects credit institutions to endorse and apply the sound and robust credit risk management and consumer protection standards laid down in the said EBA guidelines in a manner proportionate with their exposure towards non-performing and forborne exposures. These guidelines complement the provisions of Article 9(3) of CSSF Regulation 15-02 that requires credit institutions to use effective systems for identifying and managing problematic credits and for making adequate value adjustments and provisions.
\n“Significant supervised entities” as defined in Article 2, point 16 of Regulation (EU) No 468/2014 of
\nthe European Central Bank (ECB) of 16 April 2014 (SSM Framework Regulation) shall refer to the relevant ECB rules.
\nScope of application and proportionality
\nThe text above is the opening of the document; the PDF carries the whole.
\nDocument page, PDF. Source: Commission de Surveillance du Secteur Financier (CSSF), reproduced with the CSSF's consent. The French text prevails.
"}