Recital 4

(4)Ensuring adequate management and coverage of NPEs has been an important priority within the SSM since its inception. The ECB has followed a supervisory approach to NPEs based on the framework devised by the Union legislator, and taking into account the interpretative guidelines adopted by the European Banking Authority. As part of this supervisory approach, the ECB has communicated supervisory coverage expectations for NPEs held by significant supervised entities. Those expectations refer to NPEs where the exposure was originated prior to 26 April 2019 and which are therefore not subject to the deduction requirement under Regulation (EU) No 575/2013 of the European Parliament and of the Council ³ . For less significant supervised entities, coverage of such NPEs has to date not been subject to uniform supervisory practices across the SSM. Coverage of NPEs has been subject to the approaches defined by NCAs for their respective supervisory activities.