DBRS positive outlook on ECB guidelines

DBRS has recently published a commentary titled “DBRS: New Coverage Rules for NPLs Positive , but Uncertainty Remains.”

According to the Rating Agency, in essence:

  • the new rules from the ECB and EC for minimum loss coverage are positive and the impact across banks is expected to be manageable;
  • both authorities are targeting the same goal, but applying two different sets of rules and this may create some regulation uncertainty;
  • while the EC Proposal will be the minimum standard for Banks, the ECB has the means to go further on a case by-case basis for affected Banks.


While I can somehow agree on the potential confusion between the 2 sets of rules, I would stress that ECB Guidelines are more focused moral suasion and aimed to promote best practices in risk understanding and management rather than prescribing mandatory accounting standards.

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GLG – Gerson Lehrman Group – Council Member

About Massimo Famularo

Investment Manager and Blogger Focus on Distressed Assets and Non Performing Loans Interested in Politics, Economics,
This entry was posted in Entering Italian NPL Market and tagged , , . Bookmark the permalink.

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