ECB offers compromise solution for NPL problem
According to a report from Reuters, the ECB has relaxed their guidelines for banks reducing existing non-performing loans (NPLs). European Central Bank apparently responded to the increasing criticism from Europe’s southern countries. Under the new rules, the ECB’s Single Supervisory Mechanism (SSM) will set “bank-specific supervisory expectations” for the provision of NPLs, while using benchmarks to ensure consistency, Reuters reports.
In March, the ECB had presented general guidelines on how to handle new NPLs in the future. Italy, for example, feared that domestic banks would find it difficult to cope with over-regulation of existing loans. Reuters