|Author (Corporate)||European Commission|
|Series Details||COM (2018) 135|
Legislative initiative put forward by the European Commission in March 2018, which sets up a common framework and minimum requirements for an out-of-court mechanism aimed at recovering the value from loans guaranteed with collateral in case the borrower is not able to pay it back.
This initiative is seen as part of the work conducted to strengthen the Economic and Monetary Union (EMU). A Communication from October 2017 sets out a way forward to complete the Banking Union by promoting risk reduction and rish sharing in parallel, as part of the roadmap to strengthen the EMU set out by the European Commission in December 2017. Addressing high stocks of non-performing loans (NPLs) and their possible future accumulation is seen as essential to complete the Banking Union. Similarly, well-developed secondary markets of NPLs are also thought as one of the building blocks for a well-functioning Capital Markets Union (CMU).
In the context, the Council of the European Union adopted in July 2017 an Action Plan to Tackle Non-Performing Loans in Europe. This proposal is part of a series of initiatives put forward by the European Commission to address this effort. It aims to prevent excessive future build-up of NPLs on banks' balance sheets. The initiative is complementary to a number of other measures put forward on the same day alongside a Progress Report on the reduction of NPLs in Europe.
The proposal was adopted by the Commission on 14 March 2018. The Council of the European Union adopted its full negotiating position on this matter on 27 November 2019.
|Subject Categories||Business and Industry|
|Subject Tags||Banking Union, Capital Markets Union [CMU], Economic and Monetary Union [EMU], Financial Services|
|Keywords||Non Performing Loan [NPL]
|International Organisations||European Union [EU]|