Banking Union: Agreement on measures to prevent the accumulation of non-performing loans

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The Commission welcomes the political agreement reached by the European Parliament and the Council on prudential measures to further address non-performing loans (NPLs) in Europe. These measures are an important step to further reduce risks in the EU banking sector and strengthen its resilience, as highlighted in last week’s Euro Summit conclusions.

Together with the latest encouraging data on risk reduction and the recent political agreement on the banking package, this contributes to a swift completion of the Banking Union. Valdis Dombrovskis, Vice-President for Financial Stability, Financial Services and Capital Markets Union, said: “We have been working intensely over the past years to reduce risks and strengthen the resilience of the European banking sector. Today’s agreement will ensure that banks will have fewer NPLs on their balance sheets, which should increase their solidity and allow them to finance our businesses. I am counting on the European Parliament and the Council to swiftly agree on the outstanding proposals on the development of secondary markets for NPLs and facilitating debt recovery.” The agreed measures will ensure that banks set aside funds to cover the risks associated with loans issued in the future that may become non-performing. This will prevent the accumulation of non-performing exposures on banks’ balance sheets and will ultimately enable banks to perform their indispensable role in financing the economy and supporting growth. A press release is available online.

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