General Information & Client Services
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
June 30, 2017

ECB published its second stocktake of national supervisory practices and legal frameworks related to non-performing loans (NPLs) in the euro area. The report summarizes the key findings of an ECB stocktaking exercise, which was conducted to identify the range of practices related to NPL workout in all Single Supervisory Mechanism countries. The report provides a comprehensive view of the practices for treating NPLs in the euro area as at December 31, 2016 and seeks to identify key supervisory practices and guidance, in addition to current regulation and obstacles (legal or otherwise) related to the workout of NPLs.

The stocktake reveals that progress has been made within the Single Supervisory Mechanism to address the NPL issue from a supervisory perspective and the overall value of the NPL stock has decreased since the publication of the first stocktake. One of the key lessons from this analysis is that stakeholders should make preparations in quieter times so that frameworks for managing NPLs are robust from the outset. It is necessary to be proactive and prepared before NPL levels become elevated. Current legal backlogs related to insolvency can be traced back to the failure to establish out-of-court settlement mechanisms before NPL levels became elevated. Consequently, banks in some countries cannot resolve NPL issues efficiently and their NPLs have a negative impact on their performance. Some changes have been introduced to legal frameworks since the publication of the first stocktake; however, these changes have been largely incremental and it is too early to assess their effectiveness. 

 

The first stocktake was published in September 2016 and it covered the national supervisory practices and legal frameworks related to NPLs in Cyprus, Greece, Ireland, Italy, Portugal, Slovenia, Spain, and Germany. This second stocktake covers the remaining 11 countries participating in European banking supervision. These stocktakes are the result of joint efforts by the ECB and the national competent authorities, which collectively supervise more than 4,000 banks in the euro area.

 

Related Links

Second Stocktake Report (PDF) 

First Stocktake (PDF)

Keywords: ECB, NPL, Europe, Banking, Stocktake Report, SSM

Related Insights
News

CBB Proposes and Finalizes Rulebook Modules for Banks in November 2018

CBB announced the issuance of new leverage ratio requirements under Module CA (Part 3) for Islamic (Chapter CA-10) and conventional bank licensees (Chapter CA-15).

November 15, 2018 WebPage Regulatory News
News

OFR on Financial Stability Risks in Its 2018 Annual Report to Congress

OFR released its 2018 Annual Report to Congress, which examines risks to the financial stability in the United States.

November 15, 2018 WebPage Regulatory News
News

IAIS Publishes Drafts of Revised ICP 8, ICP 15, ICP 16, and ICP 20

IAIS published the drafts of revised Insurance Core Principles on Public Disclosure (ICP 20), Investments (ICP 15), Enterprise Risk Management for Solvency Purposes (ICP 16), and Risk Management and Internal Controls (ICP 8), along with a revised draft of the glossary on enterprise risk management (ERM).

November 14, 2018 WebPage Regulatory News
News

MAS Amends Notice 637 on Capital Adequacy Requirements in Singapore

MAS published the final, revised Notice 637 on the risk-based capital adequacy requirements in Singapore.

November 13, 2018 WebPage Regulatory News
News

ESMA Updates Q&A on Implementation of CSD Regulation and MAR

ESMA updated questions and answers (Q&A) documents on the implementation of the Central Securities Depository (CSD) Regulation and Market Abuse Regulation (MAR).

November 12, 2018 WebPage Regulatory News
News

FSB Finalizes and Publishes the Cyber Lexicon

FSB published a cyber lexicon, following the public consultation earlier this year.

November 12, 2018 WebPage Regulatory News
News

SRB Updates Liability Data Reporting Template for 2019

SRB published version 2.7.1 of the Liability Data Reporting (LDR) Template.

November 12, 2018 WebPage Regulatory News
News

ECB to Conduct Comprehensive Assessment of Six Bulgarian Banks

ECB will undertake a comprehensive assessment of six Bulgarian banks. The exercise, comprising an asset quality review and a stress test, follows Bulgaria’s submission of a request to establish close cooperation with ECB on July 18, 2018.

November 12, 2018 WebPage Regulatory News
News

SRB Publishes the Work Program for 2019

SRB published the work program for 2019, which sets out its priorities and core tasks for the year ahead.

November 12, 2018 WebPage Regulatory News
News

IMF Publishes Reports on the 2018 Article IV Consultation with Chile

IMF published its staff report and selected issues report under the 2018 Article IV consultation with Chile.

November 09, 2018 WebPage Regulatory News
RESULTS 1 - 10 OF 2211