90. In accordance with Article 178(1) of Regulation (EU) 575/2013, a default event shall be …

In accordance with Article 178(1) of Regulation (EU) 575/2013, a default event shall be considered to have occurred with regard to a particular obligor when either of the criteria in paragraphs 4(a) and (b) is met, or both are met. In this context, credit institutions should identify default, in accordance with the ’unlikeliness to pay’ criterion of the debtor, before the exposure becomes delinquent with the 90-days-past-due criterion. In line with the approach followed for regulatory purposes, the list of elements provided in Article 178(3) of Regulation (EU) 575/2013 as indications of unlikeliness to pay should be implemented in a way that ensures a timely detection of ‘unlikeliness to pay’ events that precipitate eventual cash shortfalls. As regards the criterion in paragraph 4(b), although for regulatory purposes in the case of retail and public sector entity obligations, for the 90-day figure competent authorities may substitute a figure of up to 180 days for different products, as it considers appropriate to local conditions (see Article 178(1)(b) of Regulation (EU) 575/2013), this possibility should not be read as an exemption from the application of the 90-day rebuttable presumption in IFRS 9, paragraph B5.5.37, for those exposures.

1. Overview

1.1 References

• Article 178 1.
• Article 178 3.

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

• EBA -

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