|Author (Corporate)||Council of the European Union, European Parliament|
|Series Title||Official Journal of the European Union|
|Series Details||L 111|
Regulation of the European Parliament and of the Council of 17 April 2019 aiming to accelerate the reduction of non-performing loans in the banking sector.
Background and further information:
Non-performing loans (NPLs) are loans where the borrower is unable to make the scheduled payments to cover interest or capital reimbursements. When the payments are more than 90 days past due, or the loan is assessed as unlikely to be repaid by the borrower, it is classified as an NPL.
This Regulation provides for a statutory prudential backstop against any excessive future build-up of NPLs without sufficient loss coverage on banks' balance sheets. It establishes common minimum levels for the amount of money banks need to set aside to cover losses caused by future loans that turn non-performing. In case a bank does not meet the applicable minimum level, deductions from own funds would apply.
The proposal was put forward as part of a package of measures addressing the stocks of non-performing loans.
+ Second progress report on the reduction of non-performing loans in Europe [COM(2018)133]
The proposal integrates an effort to complete the Banking Union, as stated by the European Commission's Communication published in October 2017 and by the roadmap to strengthen the Economic and Monetary Union (EMU) put forward in December 2017. Addressing high stocks of non-performing loans (NPLs) and their possible future accumulation is essential to complete the Banking Union.
Reflecting this EU dimension and building on the shared agreement on the need to continue and extend the actions already initiated by the Commission, in July 2017 the Council of the European Union adopted an Action plan to tackle non-performing loans in Europe. This package of measures is the Commission's response to that call from the Council.
|Subject Categories||Business and Industry|
|Subject Tags||Banking Union|
|Keywords||Banks | Banking
|International Organisations||European Union [EU]|