The proposed directive aims to prevent the excessive build-up of NPLs on European banks’ balance sheets.

Background -

The Council of the European Union (the Council) recently approved its position1 on the proposal for a directive of the European Parliament and of the Council on credit servicers, credit purchasers, and the recovery of collateral (the Proposed Directive), which is focused on managing the volume of non-performing loans (NPLs). The European Commission initially adopted the Proposed Directive on 14 March 2018 as part of a comprehensive package of measures to target the high stock of NPLs that remain on the balance sheets of European credit institutions.