Written by Carla Stamegna (1st edition),

Toy forklift hold color letter block L to complete word  NPL (abbreviation of Non Performing Loan, Non-Patent Literature) on wood background
© bankrx / Fotolia

Due to the recessions brought about by the financial crisis from the end of the past decade, more and more EU companies and citizens have faced economic difficulties in recent years and have been unable to repay their loans. As a consequence, many EU banks have accumulated high volumes of non-performing loans (NPLs) in their balance-sheets. Although almost halved in comparison to December 2014, the ratio between NPLs and the total loans extended by EU banks (NPL ratio) remains historically high when measured against the ratios of other advanced economies. High levels of NPLs require banks to hold higher amounts of regulatory capital and pay a risk premium on liquidity markets, as a result of which their profitability and growth prospects diminish. To tackle this issue, a number of different initiatives have been adopted both at national and EU level. Within this context, in March 2018 the Commission adopted a comprehensive package of measures including a proposal for a directive aimed at fostering NPL secondary markets and easing collateral recovery from secured loans.


Proposal for a directive of the European Parliament and of the Council on credit servicers, credit purchasers and the recovery of collateral
Committee responsible: Economic and Monetary Affairs (ECON) COM(2018) 135 of 14.3.2018
Co-rapporteurs: Esther de Lange (EPP, Netherlands)
Roberto Gualtieri (S&D, Italy)
Shadow rapporteurs: Bernd Lucke (ECR, Germany)
Ramon Tremosa i Balcells (ALDE, Spain)
Dimitrios Papadimoulis (GUE/NGL, Greece)
Ernest Urtasun (Greens/EFA, Spain)
Marco Zanni (ENF, Italy)
Ordinary legislative procedure (COD) (Parliament and Council on equal footing – formerly ‘co-decision’)
Next steps expected: Publication of draft report
Stage: EESC