Bank of Italy: EU standard on Default does not Prohibit Overruns

“The new definition of default may have repercussions on the credit relationships between intermediaries and their customers, whose management, as in all situations of default, may involve the adoption of initiatives to ensure the regularization of the credit relationship. The new definition by default it does not introduce a prohibition on allowing overruns: as already now, banks, in compliance with their own policies, can allow customers to use the account that leads to overruns beyond the availability present in the account or, in the case of a credit line, beyond the limit of credit “.

This is what Bankitalia specifies in a note regarding the European Regulation on prudential requirements for credit institutions and investment firms.