Loans – Capital therapy of securitisations of non-performing loans
The Committee is publishing the technical modification setting out capital necessities for non-performing loan securitisations. The rule, which the Committee began growing earlier than the onset of the Covid-19 pandemic, closes a spot within the Basel framework by setting out prudent and threat delicate capital necessities for non-performing loan securitisations.
The Committee consulted publicly on the technical modification in June 2020. In distinction to the consultative proposal, the ultimate rule enable banks to use the exterior ratings-based method to non-performing loans securitisation exposures, with out the 100% threat weight ground. As well as, the ultimate rule refines the definition of low cost incurred by the originating bank that components within the capital necessities.
Committee jurisdictions agreed to implement the technical modification by no later than January 2023. The Committee want to thank all those that contributed effort and time to express their views through the session course of.