On 8 July 2020, the European Central Bank (ECB) issued guidance on the definition of the materiality threshold for banks that are directly supervised by Member State national competent authorities (NCAs).

The guidance specifies how NCAs shall exercise the discretion conferred on competent authorities under Article178(2)(d) of the Capital Requirements Regulation in relation to less significant institutions with regard to the threshold for assessing the materiality of credit obligations past due, irrespective of the method used for the calculation of their risk-weighted exposure amounts.

NCAs are to comply with the guidance no later than 31 December 2020.

The ECB had already defined the materiality threshold for the banks that it supervises directly in a regulation published in November 2018.