General Information & Client Service
  • 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
March 01, 2018

Danièle Nouy of ECB spoke at the Delphi Economic Forum on the opportunities and challenges for European banks. She highlighted that non-performing loans (NPLs) represent one of the key challenges for European banks and explained the goals of the draft addendum to the guidance on NPLs, which ECB published in October 2017.

She said: "The addendum sets out how we expect banks to provision new NPLs. And here, two things are important but sometimes misunderstood. First, the addendum is about new non-performing exposures. Second, banks will not have to fully provision these loans right away. Unsecured loans that become non-performing will need to be fully provisioned after two years; secured loans after seven years." The addendum is intended to prevent a recurrence of the NPL problem. ECB has assessed the comments received on the consultation and will adapt the addendum accordingly. The legal concerns that were raised will be taken into account, the cut-off date will be shifted, and the final addendum will be published later this month, added Ms. Nuoy.

She mentioned that NPLs are not just an issue for banks and supervisors. The legal and judicial frameworks should also be enhanced to facilitate a more rapid resolution of NPLs. This includes action in areas such as insolvency regimes, debt enforcement, and out-of-court restructuring. In these areas, Greece has passed new laws, which is encouraging. However, passing laws is just the first step, as these laws also need to be implemented and applied. NPLs are the weakest link in the Greek banking system and it is crucial that Greek banks clean up their balance sheets. The upcoming stress test for banks will also play a positive role in this. EBA will conduct a stress test on 37 banks in the euro area, including the four significant Greek banksFor Greek banks, the stress test will be conducted earlier than for the other banks. While the results of the EBA sample will be published in November, the results for the Greek banks will be published in May, before the end of the stability support program. She concluded that, although the banking sector faces a number of challenges, conditions for dealing with these challenges "are very promising."


Related Links

Keywords: Europe, Banking, NPL, Addendum, Stress Testing, ECB

Related Insights
News

BoE Publishes the Schedule for Statistical Reporting for 2019

BoE published the updated schedule for statistical reporting for 2019. The reporting institutions use the online statistical data application (OSCA) to submit statistical data to BoE.

January 16, 2019 WebPage Regulatory News
News

PRA Delays Final Direction on Reporting of Private Securitizations

PRA and FCA have delayed the issuance of final direction, including the final template, on reporting of private securitizations, from January 15, 2019 to the end of January 2019.

January 15, 2019 WebPage Regulatory News
News

SNB Updates Forms on Supervisory Reporting for Banks

SNB published Version 1.7 of reporting forms (AUR_U, AUR_UEA, AUR_UES, AURH_U, AUR_K, AUR_KEA, and AURH_K) and the related documentation for supervisory reporting on an individual and consolidated basis.

January 15, 2019 WebPage Regulatory News
News

BCBS Finalizes Market Risk Capital Framework and Work Program for 2019

BCBS published the final framework for market risk capital requirements and its work program for 2019. Also published was an explanatory note to provide a non-technical description of the overall market risk framework, the changes that have been incorporated into in this version of the framework and impact of the framework.

January 14, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for January 2019

EBA published answers to 13 questions under the Single Rulebook question and answer (Q&A) updates for this week.

January 11, 2019 WebPage Regulatory News
News

PRA Proposes to Amend Supervisory Statement on Credit Risk Mitigation

PRA published the consultation paper CP1/19 that is proposing changes to the supervisory statement (SS17/13) on credit risk mitigation.

January 10, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimating Credit Loss Reserves

FASB issued a question-and-answer (Q&A) document that addresses particular issues related to the weighted average remaining maturity (WARM) method for estimating the allowance for credit losses.

January 10, 2019 WebPage Regulatory News
News

FED Updates Reporting and Supplemental Instructions for Form FR Y-9C

FED published the updated reporting instructions and supplemental instructions for the FR Y-9C reporting form. The reporting frequency for FR Y-9C is quarterly, as of the last calendar day of the quarter.

January 09, 2019 WebPage Regulatory News
News

PRA Updates Policy on Liquidity Reporting Under FSA047/048 and PRA110

PRA published the policy statement PS1/19 that provides feedback to responses to the consultation paper CP22/18 titled "Liquidity reporting: FSA047 and FSA048" and the proposal in CP16/18, which intended to correct the level of consolidation of the PRA110 reporting requirements.

January 08, 2019 WebPage Regulatory News
News

FED Proposes to Amend Company-Run Stress Testing Requirements

FED proposed to modify company-run stress testing requirements to conform with the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

January 08, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2468