EBA final guidelines on application of definition of default under CRR

The European Banking Authority (EBA) has published a final report amending its guidelines on the application of the definition of default under Article 178 of the Capital Requirements Regulation (CRR), as amended by CRR3. This follows the EBA's July 2025 consultation. The report introduces targeted amendments to better reflect specific aspects of non recourse factoring, increasing the exceptional days past due threshold at invoice level from 30 to 90 days for factoring arrangements to better reflect the economic features of purchased receivables. The amended guidelines also confirm that the existing 1% threshold for the net present value loss in debt restructuring remains appropriate for prudential default recognition. In addition, the guidelines have been updated to align with the amendments introduced by the CRR3. The EBA has decided not to introduce changes to shorten the probation period or to introduce specific treatment for the recognition of moratoria, considering the existing framework already provides sufficient flexibility. The guidelines will now be translated into the official EU languages and published on the EBA website. They will apply from three months after the date of publication. Competent authorities must report on whether they comply with the guidelines within two months after the publication of the translations.

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