Prudential treatment of problem assets - definitions of non-performing exposures and forbearance

The Basel Committee on Banking Supervision has today released the final guidance on the Prudential treatment of problem assets - definitions of non-performing exposures and forbearance.

The definitions promote harmonisation in the measurement and application of two important measures of asset quality, non-performing exposures and forbearance, thereby fostering consistency in supervisory reporting.

These guidelines complement the existing accounting and regulatory framework for asset categorisation. They harmonise the scope, recognition criteria and level of application of both terms, promoting a better understanding of the terms, improving identification and monitoring, and promoting consistency in supervisory reporting and disclosures by banks.

The Basel Committee thanks all those who contributed time and effort to express their views during the consultation process.