News & Analysis as of September 27, 2024

Banking Sector

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The European Union is an economic and political partnership comprised of 27 nations within the Eurozone. The EU was established in 1948 to promote stability and cooperation among member states in the aftermath of WWII. The EU maintains a common currency as well as several intranational institutions, including the European Parliament and the European Commission. less -

NPL players rethink strategy in a changing market

White & Case LLP on 9/5/2024

Elevated interest rates have led to an increase in European NPL volumes, but levels remain far below the peaks during the financial crisis period. NPL investors and servicers are rethinking their business models to adjust to...more

Non-performing and Re-performing Loan Securitisation in Europe: What Does the Future Hold?

Morgan Lewis on 5/28/2024

An elevated level of non-performing loans (NPLs) on European banks’ balance sheets drove a slate of legislation and regulation in recent years, including directives aimed at developing and enhancing a secondary market for...more

European NPLs: Market earns welcome breathing room

White & Case LLP on 10/11/2023

The ongoing decline in NPL volumes in 2022 and pivot towards smaller disposals leave European lenders well positioned to withstand adverse economic conditions. Lenders are enjoying the fruits of their labours. Having...more

EU Non-Performing Loans Directive: Potential impact of implementation in some key Member States

Hogan Lovells on 6/1/2023

The EU Directive (EU) 2021/2167 (NPL Directive), published in the Official Journal of the EU on 8 December 2021 and regulating the sale, purchase and servicing of both consumer and commercial non-performing loans (NPLs)...more

Regional spotlight on NPLs: Greece, Italy, Spain and beyond

White & Case LLP on 6/24/2022

Europe's banks continue to defy expectations—not a single country saw its banking sector’s NPL ratio increase in 2021, with the vast majority reporting an improvement....more

European NPLs: The journey from COVID-19 to Ukraine

White & Case LLP on 6/23/2022

While the spike in bad debt and subsequent tsunami of NPL and non-core loan deals that was anticipated due to COVID-19 did not materialise, the increasingly volatile market trends may lead investors to discover new and...more

The sovereign-bank nexus – Holistic solution needed to end a vicious cycle

White & Case LLP on 3/16/2020

Since the financial crisis of 2008, numerous emerging and developed countries experienced a substantial increase to their government gross debt-to-GDP ratio (sovereign debt). In addition, there were significant increases in...more

Financial Regulatory Observer - December 2019: Securitization set to come of age in NPL resolution quest

White & Case LLP on 12/31/2019

Refinements to the regulatory framework are needed before banks can make widespread use of securitization by European banks. Volumes of non-performing loans (NPLs) European banks have halved since 2015, driven by an...more

Eurozone Supervisory Priorities for 2020

A&O Shearman on 10/21/2019

The European Central Bank's Banking Supervision arm has published the 2020 supervisory priorities of the Single Supervisory Mechanism and a risk assessment for 2020. ECB Banking Supervision has identified the following risks...more

EMU: European Commission Publishes Reports on Progress

Orrick - Finance 20/20 on 6/19/2019

The European Commission has recently published the following documents, accompanied by a series of press releases and fact sheets: Communication, Deepening Europe’s Economic Monetary Union (EMU): Taking stock four years...more

Securitization in Italy: Recent Reform Opens New Investment Opportunities in Real Estate Market and Boosts NPLs/UTPs Dismissal

Jones Day on 5/9/2019

The Situation: In the last years the Italian legislature reformed the Italian securitization law to foster investments in NPLs/UTPs by Italian and foreign professional investors. A recently approved law decree provides for...more

Council of the European Union Approves Its Position on NPL Directive

Latham & Watkins LLP on 4/17/2019

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...more

Europe reaches for a new normal on NPLs - Will recent regulatory developments have their desired impact on the NPL market across...

White & Case LLP on 3/16/2019

NPLs are a hot topic, high on the European supervisory authorities' agenda. Legislative and prudential requirements to reduce NPLs are rapidly evolving. In March of 2018, the EC published a package of reforms aimed at...more

EBA Final Report on Guidelines on Management of Non-Performing and Forborne Exposures

Orrick - Finance 20/20 on 11/8/2018

On October 31, the European Banking Authority (“EBA“) published its final report on guidelines on the management of non-performing and forborne exposures (EBA/GL/2018/06)....more

Joint Committees of ESAs Recommend Action to Address Risks and Uncertainties in EU Financial System

Orrick - Finance 20/20 on 9/21/2018

On September 11, the Joint Committee of the ESAs published a report on the risks and vulnerabilities in the EU financial system (JC 2018 34), which sets out recommendations for policy action. ...more

ECB Targets Non-Performing Loan Provisions in 2021 Supervisory and Evaluation Process

Jones Day on 9/5/2018

The Situation: The European Central Bank ("ECB") has announced that it will set bank-specific supervisory expectations for the provisioning of non-performing loans ("NPLs") in a consistent way across comparable banks, which...more

EU Authorities Raise Concerns About Proposed Data Waiver for Non-Performing Loans

A&O Shearman on 6/14/2018

The European Banking Authority and the European Central Bank have written to the European Commission, the European Parliament and the Council of the European Union expressing concerns about the impact of proposed data waivers...more

European Banking Authority Consults on Draft Guidelines on Disclosure of Non-Performing and Forborne Exposures

A&O Shearman on 5/14/2018

The European Banking Authority has launched a consultation on draft Guidelines on disclosure of non-performing and forborne exposures. Since the 2007/08 financial crisis, there has been a build-up of non-performing loans in...more

Joint Committee of ESAs Report on Risks and Vulnerabilities in EU Financial System

Orrick - Finance 20/20 on 4/20/2018

The Joint Committee of the European Supervisory Authorities (“ESAs“) (that is, the EBA, EIOPA and ESMA) published its spring 2018 report (JC 2018 07) on risks and vulnerabilities in the EU financial system on April 12, 2018....more

European Central Bank Confirms Its Approach to Supervising Non-Performing Loans Levels

A&O Shearman on 3/29/2018

Following its consultation in late 2017, the European Central Bank has published the final Addendum to its Guidance for Eurozone banks on non-performing loans. The ECB published its final Guidance for banks on NPLs on March...more

Key Regulatory Topics: Weekly Update 12 January – 18 January 2018

A&O Shearman on 1/26/2018

BREXIT - HoL EU Financial Affairs sub-committee publishes transcript of BoE oral evidence on financial supervision - On 17 January, the HoL EU Financial Affairs Sub-Committee published the transcript of the oral...more

Guidelines for best practices in real estate enforcement proceedings

Orrick, Herrington & Sutcliffe LLP on 11/22/2017

The avalanche of bad loans that has hit Italy in recent years has drawn attention on the inefficiency of the judicial debt collection system, one of the leading causes of the banking crisis and the low prices that the banks...more

Further “guidance” expected for NPLs in Europe

Hogan Lovells on 10/19/2017

On 4 October 2017 the ECB published an addendum to its Guidance to Banks on non-performing loans. On 5 October 2017, the EBA published its work programme for 2018 which included further work to assist in the resolution of...more

Tackling Nonperforming Loans in Europe

Morgan Lewis on 10/10/2017

Challenges and recent developments regarding NPLs and the role of EU state aid rules. More than one trillion euros’ worth of nonperforming loans (NPLs) are concentrated in the periphery of the European Union, with banking...more

European NPLs Market

Orrick, Herrington & Sutcliffe LLP on 8/7/2017

This booklet aims to provide an updated framework of the European NPLs market, presenting the last provisions entered into force, together with some papers of national and European Authorities and some observations of our...more

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