Non-performing loans (NPLs) are a drain on bank lending and ultimately on an economy. Everyone can agree on that. More open to debate is whether guidelines are needed for the resolution of NPLs and to contain risks at bank level.
In Europe, both the European Central Bank (ECB) and the European Commission believe guidance is necessary, and they are working on additional measures to address the issue. The latest proposal is the ECB’s October addendum to guidelines published in March – and this has caused a storm.
