Timeliness of the identification of default

8.1 Firms should have effective processes that allow them to obtain relevant information in order to identify defaults in a timely manner, and to provide the relevant information in the shortest possible time and, where possible, in an automated manner, to the personnel that is responsible for taking credit decisions, and in particular:

(a) where they apply automatic processes, such as counting of days past due, the identification of indications of default should be performed on a daily basis; and

(b) where they implement manual processes, such as checking external sources and databases, analysis of watch lists, analysis of the lists of forborne exposures, and identification of specific credit risk adjustments, the information should be updated with a frequency that guarantees the timely identification of default.

8.2 Firms should analyse on a regular basis forborne performing exposures in order to determine whether any of them meet the criteria that indicate unlikeliness to pay as specified in Article 178(3)(d) of the Credit Risk: Internal Ratings Based Approach (CRR) Part and in paragraphs 3.15 to 3.24.