Belfast Telegraph

EU's new rules over stress tests for banks

Europe's banking authority has issued new rules setting out how banks must classify troubled loans ahead of "stress tests" next year.

The European Banking Authority (EBA) definitions replace a patchwork of definitions applied in various European states in the last two rounds of stress tests.

The EBA said that the new standards would "promote consistency in the process" and added that "remaining doubts about the quality of assets across the EU may be alleviated".

In a statement, the regulator set out standard definitions for poor loans and "forbearance" or loans given leeway by banks.

The new definitions class a loan as "non-performing" when a repayment is more than 90 days overdue or repayment is unlikely.

That is already the definition used in the Republic, according to guidelines issued by the Irish Central Bank in May this year.

Belfast Telegraph

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