AI Summary of Article 442 Disclosure of exposures to credit risk and dilution risk
Institutions are mandated to disclose comprehensive information relating to credit and dilution risk exposures. This encompasses definitions and scopes for terms such as 'past due' and 'impaired', alongside distinctions between 'past due' and 'default' under both accounting and regulatory frameworks. Furthermore, institutions must outline methodologies for specific and general credit risk adjustments.
Additionally, they should provide detailed insights into the performance quality of various exposures, including ageing analyses and geographical and industrial distributions. Reporting on changes in defaulted exposures and the maturity breakdown of loans and debt securities is also essential for ensuring regulatory compliance.
Article 442 Disclosure of exposures to credit risk and dilution risk
Institutions shall disclose the following information regarding their exposures to credit risk and dilution risk:
(a) the scope and definitions that they use for accounting purposes of 'past due' and 'impaired' and the differences, if any, between the definitions of 'past due' and 'default' for accounting and regulatory purposes;
(b) a description of the approaches and methods adopted for determining specific and general credit risk adjustments;
(c) information on the amount and quality of performing, non-performing and forborne exposures for loans, debt securities and off-balance-sheet exposures, including their related accumulated impairment, provisions and negative fair value changes due to credit risk and amounts of collateral and financial guarantees received;
(d) an ageing analysis of accounting past due exposures;
(e) the gross carrying amounts of both defaulted and non-defaulted exposures, the accumulated specific and general credit risk adjustments, the accumulated write-offs taken against those exposures and the net carrying amounts and their distribution by geographical area and industry type and for loans, debt securities and off- balance-sheet exposures;
(f) any changes in the gross amount of defaulted on- and off-balance-sheet exposures, including, as a minimum, information on the opening and closing balances of those exposures, the gross amount of any of those exposures reverted to non-defaulted status or subject to a write-off;