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Statutory prudential backstops addressing insufficient provisioning for newly originated loans that turn non-performing

Banking and financial services

The Commission will consider establishing statutory prudential backstops to prevent potential under-provisioning of non-performing loans (NPLs) and the build-up of future stocks for newly originated loans of NPLs in banks across Member States.

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Public consultation

ID: 1183

Lobbying Activity

11 responses

Consultation response

Fédération bancaire française, 25 May 2018

The French Banking Federation fully agrees with the importance of an efficient monitoring and supervision of Non-Performing Loans (NPLs), as they may not only jeopardize banks, but also the global economy and customers who have to face hard situations. However, French banks support a proportionate…

Financial markets association urges flexibility on non-performing loan provisions

Association for Financial Markets in Europe, 24 May 2018

AFME opposes the Commission's Pillar 1 approach to non-performing loans, arguing it is inadequate for the heterogenous nature of NPLs. They advocate for a Pillar 2 approach that accounts for banks' specific NPL portfolios and economic environments. They also request alignment between the Commission's proposal and the ECB's guidance to avoid duplicative processes.
This would reduce compliance costs and avoid operational burden from running duplicative processes.
SMEs and corporate clients face higher borrowing costs and reduced lending volumes.

Consultation response

European Banking Federation, 7 Dec 2017

Key points:  The situation of non-performing loans (NPLs) is very diverse across EU Member States and, in line with the principles of subsidiarity and proportionality, it seems appropriate to address it at a Member State level under EU general blueprint.  Any prudential backstop, also in…

Intesa Sanpaolo urges flexible provisioning for non-performing loans

Intesa Sanpaolo, 25 May 2018

The bank requests flexible provisioning rules instead of automatic backstops. They suggest extending the time-window for unsecured loans and excluding forborne exposures.
Increased flexibility would allow the bank to avoid costly capital deductions and burdensome implementation.
Small businesses and households would suffer from higher interest rates and restricted access to credit.

Consultation response

Associazione Bancaria Italiana, 25 May 2018

Please find here enclosed the comments of the Italian Banking Association. Best regards

Intesa Sanpaolo urges bank-specific approach for non-performing loans

Intesa Sanpaolo, 7 Dec 2017

Intesa Sanpaolo opposes fixed-time full provisioning and calls for bank-specific recovery measures. They suggest addressing bad loans through existing bilateral supervisory powers instead of standard rules. Forborne exposures should be explicitly excluded to mirror their flexible nature.
This would reduce compliance costs and prevent the forced sale of assets at discounted prices.
Households and small businesses would face higher interest rates and restricted access to loans.

Consultation response

Asociación Española de Banca, 25 May 2018

Please see the attached file.

Consultation response

European Savings and Retail Banking Group, 25 May 2018

Dear Sir/Madam, Thank you for the opportunity to provide our feedback to the Commission’s “Have your say” initiative on statutory prudential backstops addressing insufficient provisioning for newly originated loans that turn non-performing. We would like to share with you the following…

Consultation response

Związek Banków Polskich, 10 Apr 2018

Dear Sirs, In reference to the proposal for Regulation of the European Parliament and of the Council on amending Regulation (EU) No 575/2013 as regards minimum loss coverage for non-performing exposures, please find attached Polish Bank Association official position, signed by Krzysztof…

Consultation response

Die Deutsche Kreditwirtschaft, 25 May 2018

Please see attached file.

Consultation response

Slovenská banková asociácia, 25 May 2018

Dear Sir or Madam, On behalf of the Slovak Banking Association please find attached our comments on the proposal to amend Regulation (EU) No 575/2013 as regards minimum loss coverage for nonperforming exposures. Best regards, Peter Trúchly Banking regulation and financial markets Slovak…