262:
number of NPPLs in the financial system. The economic crisis caused by a rise of NPPLs in any particular country had been known to spread to other economies, as seen in the United States of
America’s subprime mortgage crisis. During the sub-prime mortgage crisis, the ASEAN Economic Community (AEC) has gone through difficult periods of volatile NPPLs and the issue of NPPLs remains a major challenge amongst ASEAN member countries. Early research of NPLs was dominated by internal procedures and specific attributes of the lending banks in approving, controlling and monitoring the loans to ensure they remain active and not impaired. In recent years, research showed that property loans made up the highest percentage of NPLs in countries like Malaysia and US. This had refocused research into the how macroeconomic conditions affect non-performing property loans.
144:
involves regulating banks so they take measures to prevent and resolve the NPLs in their loan books, for example by legislating accounting rules to force banks to provision against future losses, or by setting up legislative frameworks and other measures to foster a secondary market for NPLs. In this
261:
Non-performing property loans are found to lead to banking crises. The need to identify the relationships between macroeconomic factors and NPLs had been crucial for governments and financial institutions to monitor the economy and undertake necessary policies or decisions to control and reduce the
42:
that is subject to late repayment or is unlikely to be repaid by the borrower in full. Non-performing loans represent a major challenge for the banking sector, as they reduce profitability. They are often claimed to prevent banks from lending more to businesses and consumers, which in turn slows
206:
that can offer the mechanism and liquidity required to write off bad loans. Many companies see a business opportunity in buying NPL's. Buying NPL's from financial institutions with a discount, can be a lucrative business. Companies pay from 1% to 80% of the total loan and become the legal owner
244:
has proposed the creation of a
European Bad Bank and has imposed a ban on dividend distribution by banks, in a move to pressure banks to proactively tackle NPLs. The ECB has also indicated to work on the development of an "Amazon-style" platform to allow banks and investors to trade NPLs on a
228:
Although the 2020 has seen an actual decrease of non performing loans, the issue is expected to represent a major challenge for the banking industry in the post-COVID-19 era. The ECB has warned that the amount of NPLs in the
Eurozone could reach up to 1.4 trillions euros of bad loans, however
216:(i.e. packaging a bulk of NPLs into a pooled financial product such as a covered bond or asset backed security) may help preserve the market value of the NPL package to a level closer to their nominal or real economic value, thus lessening the cost of selling NPLs for banks.
229:
academic literature suggest the future rise of NPLs will be primarily driven by the pace of the economic recovery after COVID-19, and in particular the level of unemployment. In the context of the COVID-19 crisis, the deactivation of debt payment moratoria and
252:
has revised its action plan in
December 2020 by focusing on speeding up the fostering of a secondary market for NPLs and to offer support for national Asset Management Companies. The proposal was met with criticism by civil society groups.
159:
In practice, both approaches can be used simultaneously, as illustrated by the
European Commission's action plan on NPLs, while some authors have argued that systemic crisis generally require a more centralized approach.
1082:
584:
537:"Credit servicers, credit purchasers and the recovery of collateral: Fostering secondary markets for non-performing loans (NPLs) and easing collateral recovery - Think Tank"
122:
Unwillingness of banks to sell NPLs because of the costs associated with such an exercise, which could add to the NPL losses. This in turn could hurt their capital adequacy.
425:"Clarification and Elaboration of Issues Raised by the December 2004 Meeting of the Advisory Expert Group of the Intersecretariat Working Group on National Accounts"
1106:
751:
352:
200:
from the bank books. For example, the Korea Asset
Management Corporation purchased as much as 80% of bad loans at market rate following the Asian crises.
752:"The post-COVID-19 recovery: what challenges and roadmap for the banking industry?, SUERF Policy Notes .:. SUERF - The European Money and Finance Forum"
145:
approach, banks are left alone to manage their own bad loans by giving them incentives, legislative powers, or special accounting or fiscal advantages.
1044:
271:
922:
207:(creditor). The discount depends on the age of the loan, secured/ unsecured, age debtor, personal/ commercial debt, area of residence, etc.
824:
717:
Bruno, Brunella; Lusignani, Giuseppe; Onado, Marco (2017). "Why We Need to Breach the Taboos on
European Banks' Non-Performing Loans 56".
376:
462:
775:
692:
788:
984:
948:
487:
112:
Lack of any standard valuation methodology whereby financial institutions can provision for losses arising from NPL resolution.
859:
618:
536:
17:
1133:"Dynamic implications of GDP, interest rates, taxes, income, foreign direct investments, housing prices on property NPLs"
96:
Payments are less than 90 days overdue, but there are other good reasons to doubt that payments will be made in full.
1059:"Coronavirus response: Tackling non-performing loans (NPLs) to enable banks to support EU households and businesses"
1020:
642:
560:
400:
511:
281:
1132:
327:
1171:
55:
183:
Proactive incentives for banks to offer forbearance to distressed consumers and other debt relief mechanisms
1083:"European Commission's 'non-performing loans' plans to leave consumers vulnerable to 'vulture funds'"
1005:
969:
845:
809:
448:
873:
93:
At least 90 days of interest payments have been capitalized, refinanced or delayed by agreement
992:
956:
832:
796:
732:
561:"Action plan: Tackling non-performing loans (NPLs) in the aftermath of the COVID-19 pandemic"
435:
401:"Action plan: Tackling non-performing loans (NPLs) in the aftermath of the COVID-19 pandemic"
237:
173:
668:
301:
197:
115:
Incentives for banks and financial institutions to understate their NPLs in order to avoid
8:
424:
249:
177:
125:
63:
353:"Forgive but not forget: the behaviour of relationship banks when firms are in distress"
1152:
1038:
58:
has become a politically sensitive topic, culminating in 2017 with the decision by the
1058:
223:
1172:"Non-Performing Property Loans and its Origination in the Real Estate Finance System"
1156:
624:
614:
276:
116:
75:
66:
to launch an action plan to tackle NPLs. The action plan supports the fostering of a
1183:
1144:
722:
109:
Lack of a standard, accepted definition of NPLs, and no strong reporting frameworks
67:
59:
1021:"Exclusive: ECB plots Amazon-style market to prevent Wall Street COVID debt swoop"
105:
In general, the management of NPLs is made difficult due to a variety of reasons:
1209:
776:
COVID-19 and Non-Performing Loan
Resolution in the Europe and Central Asia region
736:
611:
Carving Out Legacy Assets: A Successful Tool for Bank
Restructuring? : Study
44:
1214:
1148:
211:
51:
1107:"Early Christmas for European banks: Public bailouts to become the norm again"
628:
1203:
1188:
377:"Council conclusions on Action plan to tackle non-performing loans in Europe"
86:
Non-performing loans are generally recognised as per the following criteria:
241:
230:
585:"Non-performing loans: vote on EU rules for selling NPLs to third parties"
860:
Non-performing Loans – Different this Time? NPL resolution after COVID-19
727:
949:"ECB asks banks to refrain from or limit dividends until September 2021"
923:""A bad bank must be part of our toolbox to solve banking challenges""
898:
74:). In December 2020, this action plan was revised in the wake of the
224:
Non-performing loans in the context of the COVID-19 pandemic crisis
189:
152:
71:
90:
Payments of interest and principal are past due by 90 days or more
899:"A European Bad Bank – a necessary tool for financial stability?"
693:"Utilizing AMCs to Tackle Eurozone's Legacy Non-Performing Loans"
100:
985:"ECB asks banks to address credit risk and improve efficiency"
488:"Bad debts make good profits - but what are the social costs?"
789:"COVID-19 and non-performing loans: lessons from past crises"
463:"What are provisions and non-performing loan (NPL) coverage?"
70:
for NPLs and the creation of Asset
Management Companies (aka
132:
151:
takes the form of a central organization/agency such as a "
39:
328:"Non-performing loans and the credit allocation mechanism"
256:
1137:
International Journal of Housing Markets and Analysis
137:
There are two main approaches for dealing with NPLs:
643:"The Financialisation of Distressed Debts in Europe"
716:
196:These companies use public or bank funds to remove
167:
Impose more transparency on NPLs reporting by banks
119:of facing higher funding cost on financial markets
1201:
236:To prepare for the likely new wave of NPLs, the
54:, the management of the NPLs resulting from the
272:Narasimham Committee on Banking Sector Reforms
233:are also likely to cause an increase of NPLs.
1019:Scuffham, John O’Donnell, Matt (2020-09-23).
101:Challenges and difficulties of resolving NPLs
1043:: CS1 maint: multiple names: authors list (
666:
467:European Central Bank - Banking Supervision
163:Proactive measures to tackle NPLs include:
155:" (also called "Asset Management Company").
1176:International Journal of Property Sciences
896:
1187:
1063:European Commission - European Commission
874:"ECB: the EU needs a regional 'bad bank'"
786:
726:
565:European Commission - European Commission
430:. INTERNATIONAL MONETARY FUND. June 2005.
405:European Commission - European Commission
302:"Định nghĩa khoản vay không hiệu quả NPL"
133:Policy response and NPL management models
1018:
325:
350:
14:
1202:
983:Bank, European Central (2021-01-28).
947:Bank, European Central (2020-12-15).
871:
822:
608:
257:Non-performing property loans (NPPLs)
188:Asset Management Companies (AMCs) or
1169:
1130:
982:
946:
667:Philipponnat, Thierry (2021-02-15).
204:Fostering secondary markets for NPLs
170:Accounting framework (such as IFRS9)
47:, although this theory is disputed.
24:
1163:
897:Carrascosa, Antonio (2020-12-22).
27:Loan that is unlikely to be repaid
25:
1226:
872:Enria, Andrea (26 October 2020).
862:, European Parliament, March 2021
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929:(in Italian). 18 September 2020
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326:Angelini, Paolo (2018-04-12).
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13:
1:
825:"Interview with Handelsblatt"
787:Ratnovski, Lev (2020-05-27).
287:
81:
823:Enria, Andrea (2020-10-12).
669:"Bail out people, not banks"
7:
265:
10:
1231:
1149:10.1108/IJHMA-07-2021-0078
512:"Vulture Funds in Ireland"
56:2007–2008 financial crisis
516:Financial Justice Ireland
351:Schäfer, Larissa (2016).
1189:10.22452/ijps.vol11no1.3
176:including the levels of
142:A decentralized approach
76:COVID-19 pandemic crisis
1170:Tham, Kuen-wei (2021).
1131:Tham, Kuen-wei (2022).
903:Single Resolution Board
613:. European Parliament.
381:www.consilium.europa.eu
1000:Cite journal requires
964:Cite journal requires
840:Cite journal requires
804:Cite journal requires
541:www.europarl.europa.eu
443:Cite journal requires
149:A centralized approach
238:ECB Supervisory Board
721:(1). Rome: 113–121.
219:Corporate Governance
178:capital requirements
18:Non-performing asset
609:Ayadi, Rym (2017).
589:European Parliament
250:European Commission
126:Consumer protection
64:European Commission
32:non-performing loan
774:World Bank, 2020,
245:secondary market.
620:978-92-846-0609-2
277:Default (finance)
117:reputational risk
16:(Redirected from
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38:) is a bank
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1115:. Retrieved
1113:. 2020-12-16
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1024:
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833:cite journal
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759:. Retrieved
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701:. Retrieved
699:. 2017-07-05
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649:. 2020-06-19
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593:. Retrieved
591:. 2021-01-14
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518:. 2016-06-22
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495:. Retrieved
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471:. Retrieved
469:. 2020-12-20
466:
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436:cite journal
419:
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404:
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384:. Retrieved
380:
371:
360:. Retrieved
357:www.ebrd.com
356:
346:
335:. Retrieved
331:
321:
310:. Retrieved
308:. 2023-06-28
306:What is NPL?
305:
296:
260:
247:
242:Andrea Enria
235:
231:tax deferral
227:
210:
203:
193:
187:
180:and buffers.
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62:to task the
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1087:www.beuc.eu
186:Setting up
128:regulations
1204:Categories
1117:2021-02-14
1092:2021-02-14
1068:2021-02-14
1030:2021-02-15
933:2021-02-15
908:2021-02-15
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386:2021-02-15
362:2021-02-14
337:2021-02-14
312:2023-07-06
288:References
82:Definition
1157:244229109
1039:cite news
756:SUERF.ORG
332:VoxEU.org
240:'s chair
190:bad banks
72:bad banks
733:ProQuest
266:See also
153:bad bank
1025:Reuters
214:of NPLs
50:In the
1210:Credit
1155:
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617:
1215:Loans
1153:S2CID
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428:(PDF)
1045:link
1006:help
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810:help
625:OCLC
615:ISBN
449:help
282:Nama
198:NPAs
40:loan
1184:doi
1145:doi
723:hdl
36:NPL
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