New NPL rules could open up dealflow but still penalise banks

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By Owen Sanderson
14 Sep 2020

The European Commission’s proposed new approach to non-performing loan securitization may encourage more deals to come out in fully placed format, accelerating development of the market. But the revised rules still hurt banks which hold part of the structures, and which form the vast majority of the market today, as the Commission took its lead from the Basel Committee rather than its own regulators.

The proposals, unveiled in late July, would change the EU’s Securitisation Regulation and Capital Requirements Regulation to make securitization of non-performing loans more straightforward — to clear the path for banks to sell off the expected new wave of post-Covid non-performing assets and clean up their balance sheets ...

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