Article 500 | CRR | Regulation 575/2013

Article 500 - Adjustment for massive disposals

Article 500

Adjustment for massive disposals

By way of derogation from point (a) of Article 181(1), an institution may adjust its LGD estimates by partly or fully offsetting the effect of massive disposals of defaulted exposures on realised LGDs up to the difference between the average estimated LGDs for comparable exposures in default that have not been finally liquidated and the average realised LGDs including on the basis of the losses realised due to massive disposals, as soon as all the following conditions are met:

(a)

the institution has notified the competent authority of a plan providing the scale, composition and the dates of the disposals of defaulted exposures;

(b)

the dates of the disposals of defaulted exposures are after 23 November 2016 but not later than 28 June 2022;

(c)

the cumulative amount of defaulted exposures disposed of since the date of the first disposal in accordance with the plan referred to in point (a) has surpassed 20 % of the outstanding amount of all defaulted exposures as of the date of the first disposal referred to in points (a) and (b).

The adjustment referred to in the first subparagraph may only be carried out until 28 June 2022 and its effects may last for as long as the corresponding exposures are included in the institution's own LGD estimates.

Institutions shall notify the competent authority without delay when the condition set out in point (c) of paragraph 1 has been met.

PART ONE - GENERAL PROVISIONS (Article 1-24)

PART TWO - OWN FUNDS AND ELIGIBLE LIABILITIES (Article 25-91)

PART THREE - CAPITAL REQUIREMENTS (Article 92-386)

PART FOUR - LARGE EXPOSURES (Article 387-403)

PART FIVE - EXPOSURES TO TRANSFERRED CREDIT RISK (Article 404-410)

PART SIX - LIQUIDITY (Article 411-428az)

PART SEVEN - LEVERAGE (Article 429-429g)

PART SEVEN A - REPORTING REQUIREMENTS (Article 430-430c)

PART EIGHT - DISCLOSURE BY INSTITUTIONS (Article 431-455)

PART NINE - DELEGATED AND IMPLEMENTING ACTS (Article 456-464)

PART TEN - TRANSITIONAL PROVISIONS, REPORTS, REVIEWS AND AMENDMENTS (Article 465-520)

TITLE I - TRANSITIONAL PROVISIONS (Article 465-501b)

CHAPTER 1 - Own funds requirements, unrealised gains and losses measured at fair value and deductions (Article 465-482)

CHAPTER 2 - Grandfathering of capital instruments (Article 483-491)

CHAPTER 3 - Transitional provisions for disclosure of own funds (Article 492)

CHAPTER 4 - Large exposures, own funds requirements, leverage and the Basel I Floor (Article 493-501b)Article 493 - Transitional provisions for large exposures Q&A Article 494 - Transitional provisions concerning the requirement for own funds and eligible liabilities Article 494a - Grandfathering of issuances through special purpose entities Q&A Article 494b - Grandfathering of own funds instruments and eligible liabilities instruments Q&A Article 494c - Grandfathering of senior securitisation positions Article 495 - Treatment of equity exposures under the IRB Approach RTSQ&A Article 496 - Own funds requirements for covered bonds [repealed]Article 497 - Own funds requirements for exposures to CCPs IA Article 498 - Exemption for Commodities dealers Article 499 - Leverage ITSQ&A Article 500 - Adjustment for massive disposals Q&A Article 500a - Temporary treatment of public debt issued in the currency of another Member State Q&A Article 500b - Temporary exclusion of certain exposures to central banks from the total exposure measure in view of the COVID-19 pandemic Q&AGL Article 500c - Exclusion of overshootings from the calculation of the back-testing addend in view of the COVID-19 pandemic GL Article 500d - Temporary calculation of the exposure value of regular-way purchases and sales awaiting settlement in view of the COVID-19 pandemic GL Article 501 - Adjustment of risk-weighted non-defaulted SME exposures Q&AGL Article 501a - Adjustment to own funds requirements for credit risk for exposures to entities that operate or finance physical structures or facilities, systems and networks that provide or support essential public services Q&AGL Article 501b - Derogation from reporting requirements

TITLE II - REPORTS AND REVIEWS (Article 501c-519b)

TITLE IIA - IMPLEMENTATION OF RULES (Article 519c)

TITLE III - AMENDMENTS (Article 520)

PART ELEVEN - FINAL PROVISIONS (Article 521)

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Article 500 - Adjustment for massive disposals

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