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The European Commission on Wednesday adopted a strategy to deal with bad loans piling up during the coronavirus epidemic. The committee aims to give European households and businesses access to finance during the crisis, writes MTI.
Photo: Napi.hu / Dániel Szabó
The commission estimates that 2.8 percent of loans from European banks were in default in the first half of 2020, and the supervisory body of the European Central Bank (ECB) warned that non-performing loans could exceed 1.4 billion euros. euros. Depending on how long it takes for the EU economy to recover from the crisis caused by the coronavirus, the ability of banks to make loans can deteriorate, so it is important that they get rid of their “bad credit” that always accumulates. soon as possible.
The European Commission proposes to continue developing the secondary market for depreciated assets, thus generating a greater market demand for non-performing loans. The measure will allow banks to withdraw delinquent loans from their balance sheets and provide additional protection for debtors. In order to increase market transparency, the Board calls for the establishment of an electronic data center at EU level.
The committee also calls for a reform of EU law on business insolvency and debt recovery. It also proposes the creation of national asset management companies and cooperation at EU level. These companies help troubled banks by allowing them to remove delinquent loans from their balance sheets.
The panel also foresees precautionary measures, such as the absence of state aid to troubled credit institutions during an epidemic.
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