Regulation 2019/630 - Amendment of Regulation (EU) No 575/2013 as regards minimum loss coverage for non-performing exposures - Main contents
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official title
Regulation (EU) 2019/630 of the European Parliament and of the Council of 17 April 2019 amending Regulation (EU) No 575/2013 as regards minimum loss coverage for non-performing exposures (Text with EEA relevance.)| Legal instrument | Regulation |
|---|---|
| Number legal act | Regulation 2019/630 |
| Original proposal | COM(2018)134  |
| CELEX number i | 32019R0630 |
| Document | 17-04-2019; Date of signature |
|---|---|
| Publication in Official Journal | 25-04-2019; OJ L 111 p. 4-12 |
| Signature | 17-04-2019 |
| Effect | 26-04-2019; Entry into force Date pub. +1 See Art 2 |
| End of validity | 31-12-9999 |
25.4.2019 |
EN |
Official Journal of the European Union |
L 111/4 |
REGULATION (EU) 2019/630 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 17 April 2019
amending Regulation (EU) No 575/2013 as regards minimum loss coverage for non-performing exposures
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Central Bank (1),
Having regard to the opinion of the European Economic and Social Committee (2),
Acting in accordance with the ordinary legislative procedure (3),
Whereas:
(1) |
The establishment of a comprehensive strategy to address non-performing exposures (NPEs) is an important goal for the Union in its attempt to make the financial system more resilient. While addressing NPEs is primarily the responsibility of banks and Member States, there is also a clear Union dimension to reducing the current high stock of NPEs, to preventing any excessive build-up of NPEs in the future and to preventing the emergence of systemic risks in the non-banking sector. Given the interconnectedness of the banking and financial systems across the Union, where banks operate in multiple jurisdictions and Member States, there is significant potential for spill-over effects for Member States and for the Union as a whole, both in terms of economic growth and financial stability. |
(2) |
The financial crisis led to the build-up of NPEs in the banking sector. Consumers were significantly affected by the subsequent recession and the drop in housing prices. Safeguarding consumers' rights in line with relevant Union law such as Directives 2008/48/EC (4) and 2014/17/EU (5) of the European Parliament and of the Council is essential when tackling the issue of NPEs. Directive 2011/7/EU of the European Parliament and of the Council (6) encourages prompt payment by both enterprises and public authorities and helps prevent the kind of build-up of NPEs that occurred during the years of the financial crisis. |
(3) |
An integrated financial system will enhance the resilience of the Economic and Monetary Union to adverse shocks by facilitating cross-border private risk-sharing, while at the same time reducing the need for public risk-sharing. In order to achieve those objectives, the Union should complete the banking union and further develop a capital markets union. Addressing possible future NPE accumulation is essential to strengthening the banking union as it is essential for ensuring competition in the banking sector, preserving financial stability and encouraging lending, so as to create jobs and growth within the Union. |
(4) |
In its ‘Action plan to tackle non-performing loans in Europe’ of 11 July 2017, the Council called upon various institutions to take appropriate measures to further address the high number of NPEs in the Union and to prevent their build-up in the future. The action plan sets out a comprehensive approach that focuses on a mix of complementary policy actions in four areas: (i) supervision; (ii) structural reforms of insolvency and debt recovery frameworks; (iii) development of secondary markets for distressed assets; (iv) fostering restructuring of the banking system. Actions in those areas are to be taken at Union and at national level, where appropriate. The Commission announced a similar intention in its ‘Communication on completing the Banking Union’ of 11 October 2017, which called for a comprehensive package on tackling non-performing loans (NPLs) within the Union. |
(5) |
Regulation (EU) No 575/2013 of the European Parliament and of the Council (7) forms, together... |
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