156. Institutions should define the maximum period of the recovery process for a given type of …

Institutions should define the maximum period of the recovery process for a given type of exposures from the moment of default that reflects the expected period of time observed on the closed recovery processes during which the institution realises the vast majority of the recoveries, without taking into account the outlier observations with significantly longer recovery processes. The maximum period of the recovery processes should be specified in a way that ensures sufficient data for the estimation of the recoveries within this period for the incomplete recovery processes. The length of the maximum period of the recovery processes may be different for different types of exposures. The specification of the maximum period of the recovery process should be clearly documented and supported by evidence of the observed recovery patterns, and should be coherent with the nature of the transactions and the type of exposures. Specification of the maximum period of the recovery process for the purpose of the long-run average LGD should not prevent institutions from taking recovery actions where necessary, even with regard to exposures which remain in default for a period of time longer than the maximum period of the recovery process specified for this type of exposures.

1. Forbhreathnú

1.1 Tagairtí

1.2 Ceanglais aitheanta

1.3 Caighdeáin ghaolmhara

2. Ceanglais aitheanta

3. Caighdeáin ghaolmhara

• EBA - Published by the European Banking Authority at https://www.eba.europa.eu/