On Aug. 24, 2026, EU EBA published updated Guidelines compliance table in xml format, dated Aug. 22, 2026, and applying from Oct. 19, 2026.
On Jul. 2, EBA issued consultation on draft amended guidelines.
EBA issued consultation paper on draft amended guidelines on the application of the definition of default under the capital requirements regulation.
Proposal
EBA is proposing to maintain existing 1% threshold for net present value (NPV) loss in debt restructuring.
Reflects careful balance between flexibility for institutions and need to uphold robust risk management standards.
Also proposing to increase exceptional treatment of days past due at invoice level from 30 to 90 for non-recourse factoring arrangements to better reflect economic reality.
Probation Period
To allow more proactive debt restructuring and reduce burden on debtors, considering shortened probation period from 1 year to e.g. 3 months for some forborne exposures.
Draft guidelines do not incorporate this change, also because it would widen the gap between the definition of non-performing exposures and the definition of default.
Effectiveness
The consultation runs until Oct. 15, 2025.
Sep. 3, 2025 Public Hearing Presentation
On Sep. 3, 2025, EU EBA issued presentation from public hearing on the consultation.
Covers background to consultation, legal basis for EBA proposed changes to guidelines.
Key features and concerns of forbearance triggered defaults, considerations to maintain the NPV threshold at 1%, consulted options for distressed restructuring.
And discusses other proposed amendments to the definition of default guidelines.
The consultation closes on Oct. 15, 2025, final guidelines due for issue Q1-Q2 2026.
Oct. 15, 2025 Banking Stakeholder Group Response
On Oct. 15, 2025, EU EBA issued the response of its Banking Stakeholder Group (BSG) to the consultation on draft amending guidelines on application of definition of default.
Members of BSG highlight pros and cons of having a quantitative criterion as a trigger of the defaulted status, limitations of the current criterion, unintended consequences.
And put forward concrete proposals they believe are necessary to ensure that the default classification framework remains risk-sensitive, coherent, and does not disincentivize the use of legitimate and prudent forbearance strategies.
However, some BSG members consider that the proposals significantly underestimate the risks to financial stability, consumer protection, and market integrity that could arise from applying the proposed modifications to the definition of default.
Consider that a robust and harmonized definition of default is a cornerstone of a transparent, resilient and trustworthy financial system, concerned that modification of current definition could dilute the post-financial crisis regulatory architecture designed to protect the public from excessive risk-taking, resultant credit quality deterioration.
Welcome proposal by EBA to update the guidelines in line with the revised wording of CRR3 Article 178 while preserving prudential soundness of current framework.
Document dated Oct. 15, 2025, received from EU EBA Oct. 20, summarized Oct. 23.
May 7, 2026 Final Report and Amended Guidelines
On May 7, 2026, EU EBA published its final report amending the Guidelines on the application of the definition of default, following public consultation issued Jul. 2025.
Report introduces targeted changes to better reflect aspects of non-recourse factoring.
Confirms that the 1% threshold applies to reductions in net present value (NPV) loss threshold in debt restructuring remains appropriate for prudential default recognition.
EBA introduces targeted changes to address specific technical aspects of the past-due treatment of recourse factoring, in particular, the specific technical past-due treatment at the individual invoice level has been extended from 30 to 90 days.
The Guidelines are also updated to align with amendments introduced by CRR3.
EBA finds that the current NPV threshold framework is sufficiently flexible, risk-sensitive and consistent with the accounting framework and does not lead to default misclassifications and to restructurings resulting in losses.
Is aligned with other thresholds used for default identification, for simple framework.
So EBA has decided not to amend the framework regarding the NPV threshold.
The Guidelines will be translated into official EU languages and issued on EBA website.
Deadline for competent authorities to report whether they comply will be 2 months after that publication, the Guidelines will apply from 3 months after that publication.
Jul. 2026 Correction Published
On Jul. 16, 2026, EU EBA issued a correction (dated Jul. 17, 2026) to its final report amending the Guidelines on the application of the definition of default.
Document dated Jul. 16, 2026, was added on Aug. 26, 2026, due to editorial backfill.
On page 26, paragraph 5: for (5) These guidelines are addressed to competent authorities as defined in art 4 point (2)(i-ii-iii iv-v-vi-vii) of Reg 1093/2010 and to financial institutions as defined in art 4 point (1) of Reg No 1093/2010.
Read (5) These guidelines are addressed to competent authorities as defined in art 4 point (2)(i) of Reg 1093/2010 and to financial institutions as defined in art 4(1) Reg 1093/2010.
Aug. 2026, Guidelines Compliance Table Published
On Aug. 24, 2026, EU EBA published updated Guidelines compliance table in xml format, dated Aug. 22, 2026, and applying from Oct. 19, 2026.
Regulators
EU EBA
Entity Types
Bank
Reference
Gd EBA/GL/2026/05, 8/22/2026; Rp EBA/GL/2026/05, 7/16/2026; Rp EBA/GL/2026/05, PR, 5/7/2026; Rsp, 10/15/2025; PR, Mt, 9/3/2025; EBA/CP/2025/09, PR, 7/2/2025; CRD/CRR Dir 2013/36, Reg 575/2013; CRR 2 Reg 2019/876; EBA-GL-2016-07
