CHANGE IN LIMITS ON LARGE EXPOSURES

The new legislation generally maintains the limit such that the value of all the exposures of
a credit institution to a customer (entity or economic group) may not exceed 25% of its
own funds.
Where that customer is a credit institution or investment firm, or where the economic
group includes one or more credit institutions or investment firms, the value of all exposures
may not exceed 25% of the credit institution’s own funds or €150 million, whichever
the higher, provided that the sum of exposure values to all customers in the economic
group that are not credit institutions or investment firms does not exceed 25% of the
credit institution’s own funds.
Where the amount of €150 million is higher than 25% of the credit institution’s own funds,
in accordance with the policies and procedures to manage and control concentration risk,
the value of the exposure shall not exceed a reasonable limit in terms of the credit institution’s
own funds. That limit shall not be higher than 100% of the credit institution’s own
funds.
The previous limit that total large exposures could not exceed 800% of the credit institution’s
own funds is eliminated.
The following exceptions to limits on large exposures are also eliminated: 1) holdings in
certain insurance companies up to a maximum of 40% of own funds, and 2) claims on
certain central governments and central banks of countries that are denominated and financed
in the borrower’s national currency.