Capital Requirements Regulation to Introduce New Prudentiality Requirements

CRR to Introduce Common Minimum Loss Coverage Levels and Backstop

NPE Loss Coverage Requirement Tied to New COREP Reporting

In a recent move to enhance financial stability, the Capital Requirements Regulation (CRR) will introduce new prudentiality requirements for banks. These requirements include common minimum loss coverage levels and a statutory backstop for newly originated loans that become non-performing exposures (NPEs). This is in addition to a new COREP (Common Reporting Framework) reporting requirement for NPE loss coverage.

The supervisory backstop is designed to complement existing prudential rules in Regulation EU No 575/2013 relating to own funds.

The changes aim to ensure that banks have sufficient capital to withstand potential losses and maintain financial stability. Competent authorities will have the power to exercise supervisory oversight in accordance with Directive 2013/36/EU.