Consultation paper amending Guidelines on definition of default

The European Banking Authority (EBA) today launched a public consultation on its draft amended  Guidelines on the application of the definition of default under the Capital Requirements Regulation (CRR). As part of its commitment to financial stability, transparency, and consistency, the EBA is proposing to maintain the existing 1% threshold for net present value (NPV) loss in debt restructuring. This approach reflects a careful balance between flexibility for institutions and the need to uphold robust risk management standards. The consultation runs until 15 October 2025.