European Parliament (EP) published a report that discusses the EC package on the proposal for a directive aimed at fostering NPL secondary markets and easing collateral recovery from secured loans. In March 2018, EC had adopted a comprehensive package of measures, including a proposal for a directive aimed at fostering NPL secondary markets and easing collateral recovery from secured loans.
Post-crisis, many EU banks have accumulated high volumes of non-performing loans (NPLs) in their balance sheets. Although almost halved in comparison to the December 2014 level, the ratio between NPLs and the total loans extended by EU banks (NPL ratio) remains historically high when measured against the ratios of other advanced economies. High levels of NPLs require banks to hold higher amounts of regulatory capital and pay a risk premium on liquidity markets, as a result of which their profitability and growth prospects diminish. To tackle this issue, a number of different initiatives have been adopted both at the national and EU levels. This report examines the state-of-play of the implemented and ongoing issues in the area of NPLs.
Related Link: Report
Keywords: Europe, EU, Banking, NPLS, Credit Risk, Regulatory Capital, Secondary Market for NPLS, European Parliament
Previous ArticleOCC Consults on Company-Run Stress Test Requirements for Banks
Next ArticleFSB Publishes Its Work Program for 2019
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.