ECB consults on draft guidance on leveraged transactions

ECB consults on draft guidance on leveraged transactions

The European Central Bank (ECB) has launched a consultation on draft guidance on leveraged transactions, with the aim of developing clear and consistent definitions, measures and monitoring of leveraged transactions.

The draft guidance recommends that banks put in place a unique and overarching definition of leveraged transactions and clearly define their strategy, specifically in relation to the underwriting and syndicating of leveraged transactions. The guidance also advises banks to ensure that realised transactions adhere to their risk appetite standards through a solid credit approval process and regular monitoring of leveraged portfolios. The ECB also recommends that the senior management of banks should regularly receive comprehensive reports on leveraged transactions.

Comments are due by 27 January 2017.