Non-Performing Loans (NPL) have a twofold negative impact on banks. At a micro prudential level, NPEs cause a lower profitability and efficiency. At a macro prudential level, they are associated with a lower lending flow causing stagnant growth, and heightened systemic risk. In July 2015, the ECB’s Supervisory Board formed a group of high-level experts to develop a supervisory approach aimed to reduce NPEs and prevent their accumulation. All these initiatives demand extra effort from institutions. However, there are synergies to be found with other reports such as with FINREP, which deals with the disclosures of NPEs/NPLs, forbearance, and estimation of allowances.

The EBA presented three consultation papers concerning FINREP, COREP and COREP-LCR that detail the proposed amendments to the ITS supervisory reporting. These amendments will be under framework 2.9 that will come into effect from 31 December 2019. Unlike previous taxonomy publications, the EBA has launched these changes in a modular basis and has also provided a schedule of the upcoming releases until April/May of 2020.

MLAdvisory, independent consulting firm expert in European banking Regulation, announces the arrival of Eric Auclair as a Partner – Head of regulatory Transformation and Operational Excellence.