EnglishItalianoRomaRoma Lun - Ven 09:00-18:00 +39-06-68445-1
MCE Locam S.p.A.
Intermediario Finanziario ex art.106
Abbiamo la fiducia di
20,000 Clienti
Le nostre filiali
Roma e Milano
Contattaci

Deteriorated Financial Activities: definitions and insights

MCE Locam S.p.A. > Categorie finanziabili > Deteriorated Financial Activities: definitions and insights
Progetto Focus, Rubrica

DEFINITION

The definitions of Deteriorated Financial Assets are provided by the Bank of Italy in Circular No. 272 of 2008 and amended (in the. . . (in the version below made available) with the 7th update of 20 January 2015. This update was necessary in order to align the definitions with those indicated by the European Banking Authority.

Impaired Financial Assets means loans, all debt securities, guarantees and other commitments to debtors in the category of persons to whom collection is uncertain in terms of time and amount. We’re talking about the so-called Non Performing.

The categories into which the Bank of Italy divides its DETERIORY FINANCIAL ASSETS are:
– PROBABLE DEFAULT: UNLIKELY TO PAY;
– BUILDINGS;
– EXPIRED/DETERIORATED EXPOSURES: PAST DUE;

These three summed categories correspond to the aggregate defined by the European Banking Authority NON PERFORMING EXPOSURE.

CATEGORIES

Probable Defaults – Unlikely to Pay
This category includes those loans for which the bank has reason to believe that it is unlikely that the debtor (principal and interest) will meet all its obligations in full. The quot belief that it is unlikely” must be dissociated from the presence of overdue or unpaid instalments and instead influenced by objective risk elements such as, for example, an economic crisis in the sector to which the debtor belongs. The sum of the exposures to a debtor (excluding those receivables for which there are already elements such as to consider them non-performing) composes the probable default.

Credits overdue
We mentioned the suffering above. This is the sum of the exposures to a single entity in a state of insolvency, regardless of any guarantees offered to cover the exposure.

Expired/Deteriorated Exposures – Past Two
These are exposures, relating to the debtor or the transaction, which are not classifiable as Non-performing and Probable Defaults.

With this article on Deteriorated Financial Activities we want to launch a project made up of a collection of concepts and definitions fundamental to our business with the indication of authoritative sources. We cannot aim for exhaustiveness, but we would like to declare ourselves open to dialogue and to the stimuli that you wish to offer us in order to always have new topics to deal with. Write to us to suggest topics for the address book at Marketing.