NPLs

AFME is fully supportive of actions intended to remove impediments to the development and deepening of European secondary markets for NPLs and distressed debt. Various impediments could be tackled by measures that seek to standardise the NPLs sale process, including data requirements, as well as the approach and organisational needs of sellers and buyers.

See our response to the European Commission's consultation on The development of secondary markets for non-performing loans for more detail.

AFME has greatly contributed to the European insolvency reform debate. The inconsistencies between the substance and the quality of national insolvency regimes remain major impediments to avoiding a loan becoming an NPL and may also impede quick and efficient resolution of NPLs by banks and other entities. AFME supports the development of a European legislation harmonising minimum standards of insolvency proceedings as means to facilitate more predictable and orderly outcomes for corporate restructurings.

AFME has also contributed to the Prudential aspects of the Council’s NPL action Plan via the AFME Prudential division. AFME strongly believes that regulatory efforts should focus on bank-specific measures. The European approach to loan loss provisioning should consider differences in recovery periods by jurisdictions, portfolios, or type of security.