The European Parliament's Committee on Economic and Monetary Affairs adopted a negotiating position close to that of the Council of the European Union on Thursday 6 December on the proposal for a regulation introducing common minimum coverage thresholds for bank loans that would become non-performing exposures (NPEs) after the entry into force of the future European rules (see EUROPE 12129).
“We will work hard to swiftly conclude this file before the end of the year and to adopt the directive before the EU elections" in May 2019, said Roberto Gualtieri (S&D, Italy), co-rapporteur.
In Parliament, it is considered that a single trilogue negotiating session with the Austrian Presidency of the Council could be sufficient.
The legislative proposal sets a timetable for banks to provision for losses they would incur if a bank loan, issued after the application of the future rules, becomes non-performing.
A distinction is made between loans secured with certain assets and unsecured loans. The coverage calendar will be faster for the second category, with Parliament - like the Council - counting on a period of three years.
According to a parliamentary source, there are two differences between the positions of the European Parliament and the Council. For non-performing secured loans, these two positions provide that the maximum provisioning of 100% is reached after seven or nine years, depending on the type of collateral.
But the provisioning curve favoured by the Parliament will be more gradual in the early years and steeper at the end of the period, in order to reduce "any potential negative impact" of the measure on the financing of the economy, according to Mr. Gualtieri.
The other difference concerns the repurchase of NPE loans on the secondary markets. Two options were in conflict with, on the one hand, Esther de Lange (EPP, the Netherlands), co-rapporteur, who wanted to limit as much as possible the repurchase of non-performing loans by the banks themselves, and, on the other hand, Mr Gualtieri, who was more flexible in this matter.
The 'Gualtieri' option was finally adopted, while the 'De Lange' option would be closer to the one recommended by the Member States. A possible compromise solution with the Council would be to involve supervisors more closely in the supervision of NPE buyback operations by banks. (Original version in French by Mathieu Bion)