ECB published its opinion (CON/2018/54) on a proposal for the directive on credit servicers, credit purchasers, and recovery of collateral. Since ECB considers that the proposed directive falls within its scope of competence, it has decided to exercise its right to submit its opinion.
ECB has been a strong proponent of the development of secondary markets for bank assets, particularly non-performing loans (NPLs), as reflected in the European Council’s action plan to tackle NPLs in Europe. In context of the large stocks of NPLs that remain on the balance sheet of some European credit institutions and as part of a comprehensive solution to NPL resolution, the development of secondary markets may contribute to reducing NPLs. Well-functioning secondary markets may also prevent stock of NPLs from building up in the future.
The proposed directive establishes a number of reporting requirements for credit servicers, credit purchasers, and credit institutions. EU legislators should carefully consider whether these reporting requirements will impede the efficient functioning of the secondary market for NPLs, since a significant reporting burden could deter new entrants to the market or result in duplication of data for competent authorities. The proposed directive gives EBA a mandate to develop draft implementing technical standards that specify the formats to be used by creditors that are credit institutions for the provision of detailed information on their credit exposures in the banking book to credit purchasers for screening, financial due diligence, and valuation of the credit agreement. ECB notes that AnaCredit Regulation (2016/8679) provides for a new dataset, with detailed information on individual bank loans in the euro area. Considering these new regulatory developments, it is important that data templates developed by EBA should take into account the collection of granular credit and credit risk data or any other relevant initiatives to ensure that there is no duplication of efforts and to minimize reporting requirements for credit institutions.
Keywords: Europe, EU, Banking, NPLs, AnaCredit, Reporting Requirements, CON/2018/54, Opinion, EC, EBA, ECB
Previous ArticleFSB Assesses Impact of Regulatory Reforms on Infrastructure Finance
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.
ECB finalized guidance on the way it expects banks to prudently manage and transparently disclose climate and other environmental risks under the current prudential rules.
BCBS published a technical amendment to the capital treatment of securitizations of non-performing loans by banks.
BoE announced that the Data and Statistics Division is planning to move collection of statistical data to the BoE Electronic Data Submission (BEEDS) portal.
APRA published the updated reporting standards and guidance for the collection of Economic and Financial Statistics (EFS), following a consultation process. Also published was a response letter to the feedback received on the proposal for amending the EFS reporting standards and guidance.
EC is consulting on a draft delegated regulation to supplement the Taxonomy Regulation (2020/852) by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as environmentally sustainable.
The IFRS Foundation published material highlighting the ways in which existing requirements in IFRS standards require companies to consider climate-related matters when their effect is material to the financial statements.
FSB published a progress report on the implementation of reforms to major interest rate benchmarks, including the London Inter-bank Offered Rate (LIBOR) benchmark.