MEPs are set to introduce EU rules for standard minimum coverage of bad loans, on Thursday.
Measures to mitigate the risk of future, non-performing loans (NPLs) accumulating due to the recessions brought about by the 2008 financial crisis are to be approved by the Parliament. They will help strengthen the Banking Union and ensure competition in the banking sector, as well as preserving financial stability and encouraging lending to businesses.
NPLs are loans that are either more than 90 days past due, or are unlikely to be fully repaid. To complement the existing rules relating to own-funds, Parliament will vote to introduce a common minimum loss coverage. Each bank will have to set an amount of money aside, to cover losses caused by future loans that could become non-performing. Where NPLs are not sufficiently covered, a deduction from banks' own funds will be required.
Procedure Code: 2018/0060(COD))
Debate: Wednesday, 13 March
Vote: Thursday, 14 March
Procedure: Co-decision (1st reading with agreement)