European Commission to help banks offload NPLs faster

The Commission intends to present the new comprehensive NPL strategy before the end of the year. The European Commission strategy will focus on a mix of “complementary policy actions”, especially in the areas of:

• Restructuring, insolvency and debt recovery frameworks (beyond the extra-judiciary recovery of collateral);
• The development of secondary markets for NPLs.

Initially reported in the Financial Times, the strategy is expected to propose a series of measures to catalyse the sale and purchase of banks’ bad loans.

A European Commission spokesperson said: “It is important to tackle NPLs in an effective way. This has been and will remain a long-standing, key objective of our financial policy.

"Drawing on lessons from the last severe economic crisis, it is imperative to address any renewed build-up of NPLs on banks’ balance sheets as early as possible, while being mindful of debtor protection issues, in order to combat the implications of the pandemic.”