On 3 July 2018, the European Central Bank (ECB) issued a public consultation on a draft ECB Regulation on the materiality threshold for credit obligations past due.

The draft Regulation sets out a single materiality threshold for all significant institutions in Member States participating in the Single Supervisory Mechanism, defined for both retail and non-retail exposures, irrespective of the method used for the calculation of capital requirements. The materiality threshold will comprise an absolute component, expressed as a specific maximum amount for the sum of all amounts past due owed by an obligor, and a relative component, expressed as a percentage, reflecting the amount of the credit obligation past due in relation to the total amount of all on-balance-sheet exposures to that obligor.

The materiality threshold will increase the comparability of capital requirements among banks.

The deadline for submitting comments is 17 August 2018.