1.4.1.4 Package to address NPLs

As a result of asset quality reviews and stress tests conducted by the ECB, it became clear that a number of banks in participating Member States experience high levels of non-performing loans (NPLs). This was the reason for the Commission to propose the package to address high NPL ratios on 14 March 2018. The package consists of a proposal for a regulation amending the CRR and introducing common minimum coverage levels for newly originated loans that become non-performing (non-performing exposures or NPEs) (the NPE Proposal),1 a proposal for a new directive on credit servicers, credit purchasers and the recovery of collateral (the NPL Proposal)2 and a blueprint on the set-up of national asset management companies (AMCs) dealing with NPLs.3 The NPE Proposal was adopted and published as Regulation (EU) 2019/630 on 25 April 2019 (NPE Regulation). The NPE Regulation applies from 26 April 2019. At the time of writing this dissertation, work on the NPL Proposal was still ongoing.