Tackling non-performing loans in the aftermath of the COVID-19 pandemic

Author (Corporate)
Series Details COM (2020) 822
Publication Date 16/12/2020
Content Type


Communication published by the European Commission on 16 December 2020, setting out an Action Plan aimed at tackling Non-Performing Loans (NPLs) to prevent a build-up as a result of the crisis caused by the COVID-19 (coronavirus) pandemic.

Further information:

NPLs are bank loans that are more than 90 days past-due or are unlikely to be repaid in full without requiring the sale of collateral.

This Communication builds on a set of conclusions adopted by the Council of the European Union in 2017. It proposes to address the issue through a series of actions and measures with four main goals:

  • further develop secondary markets for distressed assets;
  • reform the EU’s corporate insolvency and debt recovery legislation;
  • support the establishment and cooperation of national asset management companies (AMCs) at EU level;
  • implement precautionary public support measures, where needed.
Source Link https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2020:822:FIN
Alternative sources
  • https://ec.europa.eu/info/publications/201216-non-performing-loans-action-plan_en
Related Links
Commentary and Analysis
BEUC: Press Release, 16/12/2020: European Commission’s ‘non-performing loans’ plans to leave consumers vulnerable to ‘vulture funds’ https://www.beuc.eu/publications/european-commission%E2%80%99s-%E2%80%98non-performing-loans%E2%80%99-plans-leave-consumers-vulnerable-%E2%80%98vulture/html
NPL Markets: News, 17/12/2020: The new action plan of the European Commission to tackle NPL – our summary and comments https://www.nplmarkets.com/de/news/article/the-new-action-plan-of-the-european-commission-to-tackle-npl-%E2%80%93-our-summary-and-comments/

Reuters, 16/12/2020: EU to help banks to jettison loans soured by COVID https://www.reuters.com/article/eu-banks/idUSKBN28Q1RC
The Guardian, 16/12/2020: 'Bad loans' of banks risking credit crunch, warns European commission https://www.theguardian.com/world/2020/dec/16/bad-loans-of-banks-risking-credit-crunch-warns-european-commission
The Irish Times, 16/12/2020: McGuinness seeks to make it easier for banks to sell bad loans https://www.irishtimes.com/business/financial-services/mcguinness-seeks-to-make-it-easier-for-banks-to-sell-bad-loans-1.4438431
RTÉ News, 16/12/2020: EU unveils plans to help banks ditch bad loans https://www.rte.ie/news/business/2020/1216/1184830-eu-unveils-plans-to-help-banks-ditch-bad-loans/

European Commission: Non-performing loans (NPLs) https://ec.europa.eu/info/business-economy-euro/banking-and-finance/financial-supervision-and-risk-management/managing-risks-banks-and-financial-institutions/non-performing-loans-npls_en
European Commission: Press Release, 16/12/2020: Coronavirus response: Tackling non-performing loans (NPLs) to enable banks to support EU households and businesses https://ec.europa.eu/commission/presscorner/detail/en/IP_20_2375
European Commission: Questions and Answers: Tackling non-performing loans to enable banks to support EU households and businesses (16 December 2020) https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_2376

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