Asset quality indicators

Asset quality indicators should measure and monitor the asset quality evolution of the institution. More specifically, they should indicate when asset quality deterioration could lead to the point at which the institution should consider taking an action described in the recovery plan.

The asset quality indicators may include both a stock and a flow ratio of non-performing exposures in order to capture their level and dynamics.

The asset quality indicators should cover aspects such as off-balance-sheet exposures and the impact of non-performing loans on the asset quality.