The European Council adopted conclusions on the EC's review of the EU's Capital Markets Union Action Plan. Focus is on actions related to sustainable finance and financial technology, with work being planned on actions announced in 2015 and not yet delivered; the follow-up to actions completed under the 2015 action plan; and new priority actions.
The Council also agreed on an action plan to address the problem of non-performing loans (NPLs) in the banking sector. It outlined a mix of policy actions to help reduce stocks of NPLs, which remain at high levels within the EU, and to prevent their future emergence. Resolving NPLs can help reduce financial fragmentation and facilitate capital flows within the single market. On the basis of an expert report, the Council highlighted the need for action in the areas of bank supervision, the reform of insolvency and debt recovery frameworks, the development of secondary markets for NPLs, and restructuring of the banking industry.
While speaking at the ECOFIN press conference, the EC Vice President Valdis Dombrovskis discussed the European action plan to tackle NPLs, in the context of the Capital Markets Union action plan. He highlighted the launch of a public consultation on how the EU can tackle barriers to entry for companies willing to purchase NPLs or servicing loans on secondary markets. The focus is also on improving access to loan collateral for secured creditors, which could help pre-empt the building up of new NPLs and ultimately allow better access to credit.
Keywords: Europe, EC, Banking, Securities, NPL, Capital Markets Union, Action Plan
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