EBF STATEMENT
Prudential backstop for NPLs:
EBF notes EU trilogue deal
BRUSSELS, 19 December 2018 – The European Banking Federation notes that European Union trilogue discussions coordinated by the Austrian EU presidency this week have led to an agreement on a prudential provisioning backstop for future non-performing loans (NPLs).
“At a European level, banks in recent years have significantly reduced their NPL exposure through enhanced loan selling activities,” said Gonzalo Gasos, Head of Banking Supervision at the EBF. “The NPL ratio for the European banking sector now is less than half what it was at its peak.”
“The regulation approved in the trilogue is meant to prevent the accumulation of NPLs in the future. However, it may restrict the flexibility of banks when it comes to handling loan requests. Time will tell whether this deal will have unintended consequences on credit supply. In our view a comprehensive impact assessment, either by EU or academic experts, is essential to shed more light on this important aspect.”
Media contact:
Raymond Frenken, Head of Communications
r.frenken@ebf.eu +32 496 52 59 47
About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from 45 countries. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere. Website: www.ebf.eu Twitter: @EBFeu.
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]]>Publication date: 15 July 2016
Key messages:
- The EBF supports the harmonisation of the definition of non-performing exposures and forbearance to ensure consistency in its application, transparency, and comparability of risk parameters among banks and to improve banking supervision at global level.
- The European banking sector has undertaken significant investments on internal processes and IT infrastructure in order to comply with the recently implemented new definitions of non-performing exposures and forbearance as required by the European Banking Authority (EBA). The EBF therefore advocates for consistency of the Basel Guidelines and the EU rules and for a level playing field at global level.
- Finally, while in general the EBF supports the objective to promote consistency between reporting and supervisory frameworks, it is important to acknowledge that the new definitions introduced by the BCBS are not mandatory for the use in accounting concepts.
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
The post EBF response to Basel Committee Consultative Document: Guidelines: Prudential treatment of problem assets – definitions of non-performing exposures and forbearance appeared first on EBF.
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