The Commission is delivering on the Council’s Action Plan to address the high stock of NPLs and prevent their possible future accumulation. The measures proposed by the Commission aim to put the EU banking sector on an even sounder footing for future generations and are an essential step towards the completion of the Banking Union.
My take is that the most relevant part of the package is the amendment to Capital Requirements Regulation (CRR) (here the proposal) that provides a common minimum coverage levels for newly originated loans that become non-performing, because it provides a clear guideline on what is expected to be a prudential behavior for banks.
Other measures like enabling accelerated out-of-court enforcement of loans secured by collateral and harmonizing requirements and creating a single market for credit servicing and the transfer of bank loans to third parties across the EU are in my very own opinion kind of “political sweetener” set to sell to the wide public the tightening to rules on capital.
In addition I am definitely against the idea of national AMCs that i believe are of no use for the assumed purpose. I am going to write in more detail on this topic in next days, meanwhile pls find below a synthetic table on the contents of the package
GLG – Gerson Lehrman Group – Council Member