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Practical Manual of Companies 2020.

Credit risk coverage in financial institutions

Royal Decree 1178/2020, of December 29, introduces modifications to articles 8 and 9 of the Corporate Tax Regulation, approved by Royal Decree 634/2015, of July 10, referring to the coverage of credit risk in financial entities.

On January 1, 2018, Circular 4/2017, of November 27, of the Bank of Spain, came into force, the objective of which was to adapt the accounting regime of Spanish credit institutions to the changes in the European accounting system derived from the adoption of two new International Financial Reporting Standards (IFRS). The new Circular makes it necessary to adapt article 9 of the Regulation, relating to credit risk coverage, to the new accounting terms used in said Circular, also modifying article 8 of said Regulation in the reference it contains to a section of the aforementioned article 9.