|
The
new rules, which need to be backed by the European Parliament,
would introduce a mechanism to favor out-of-court procedures on
foreclosures, speeding up banks' recovery of collateral used by
borrowers to obtain loans when they fall behind on their
repayment schedule.
The EU's stock of non-performing loans is at its lowest since
the financial crisis but remains high in some countries,
including Greece, Cyprus, Portugal and Italy, tying up capital
and making it more difficult for banks to lend to firms and
households.
The mechanism, envisaged only for business loans and not
consumer loans, is expected to reduce the losses banks incur
when lenders offload non-performing loans. It would, however,
increase the burden on borrowers.
The rules would apply to new loans and would have to be agreed
between a bank and a borrower upfront, normally when the loan is
granted.
"It is important to give legal tools to banks to recover the
value of failing loans quickly without having to go to court,
while ensuring a high level of protection for borrowers,"
Finland's finance minister Mika Lintila said in a statement.
(Reporting by Francesco Guarascio @fraguarascio; Editing by
Kirsten Donovan)
[© 2019 Thomson Reuters. All rights
reserved.] Copyright 2019 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
