BUSINESS

SSM calls for focus on NPLs of companies

EVGENIA TZORTZI

TAGS: Finance

Daniele Nouy, the chair of the European Central Bank’s Single Supervisory Mechanism (SSM), has highlighted the delays in the settlement of nonperforming corporate loans, adding that debts secured by main residences are not the priority.

In response to a question from a Greek MEP, Nouy said that “the problem of NPLs is huge and concerns many loans, mostly corporate ones. There is no reason to begin with primary residences.”

The French official added that “the settlement will have to start anyway as that would be to the benefit of both the citizens and the corporations, and would allow them to turn their nonperforming loans into performing ones.”

She said that the SSM has asked a task force to draft a set of guidelines for handling the accumulation of bad loans, with the conclusions set to be delivered within November and constitute a roadmap for banks and the national regulatory authorities.

The delay, which has seen the value of bad corporate loans soar to almost 65 billion euros, concerns the bill on the out-of-court mechanism for the settlement of debts to the state and banks, the law change on the pre-bankruptcy procedure, and the legal coverage of bank officials signing corporate debt settlements – an issue that also affects the sale of bad loans.

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