The European Commission today unveiled its action plan to reduce
non-performing loans (NPLs). Christian Ossig, Chief Executive of the
Association of German Banks, commented as follows: “The European
Commission is right to launch an initiative to counter a possible sharp
increase in non-performing loans on banks’ balance sheets.” But it was
questionable, he said, whether the planned measures would achieve the
desired effect. “In particular, the bad banks now planned should not be
allowed to lead to a mutualisation of debt,” Ossig stressed.
Given the coronavirus pandemic, it would have made sense to do more
to strengthen banks’ room for manoeuvre on lending. This could have been
accomplished, for example, by giving banks more flexibility concerning
capital set aside to cover non-performing loans. The banking association
believes the current rules are too rigid and inflexible.
BDB
© BDB - Bundesverband Deutscher Banken
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