The implementation of the ECB Addendum on non-performing loans represents a first step, but more is needed to overcome the misalignments with the European Union. This is the judgment of the Italian Banking Association contained in a resolution unanimously approved by its executive.
Within the text, the ABI "notes the improvements made to the text of the Addendum to the ECB guidelines" on Non-performing Loans, but also notes "the need for the necessary connections between what is indicated by the Addendum and the application of accounting standards and public reporting obligations”. Furthermore, the executive committee underlines how the Addendum - in the version published on 15 March 2018 - does not provide for generalized obligations for banks and does not produce mandatory legal effects and therefore is not a first pillar measure. The Addendum provides an indication of the expectations of European supervisory authorities regarding the ways in which banks will assess the specific future risks to which they are exposed.
Therefore, according to the ABI "the contents of the Addendum will have to be evaluated and legally framed with respect to the changes to the European regulatory framework, in necessary connection - also with respect to their entry into force - with the Commission's proposals on the treatment of exposures to credits deteriorated, overcoming the misalignments currently envisaged". It is essential, according to the Association, "to ensure consistency between the different levels of the regulatory sources and full connection between the various European authorities".
Finally, the ABI expressed the hope that "a stabilization and simplification of the European regulatory framework will be achieved as soon as possible, a condition for guaranteeing the right balance, which has not been achieved today, between the needs of stability and growth and giving European banks legal certainty ”.
The European Parliament and the Council of the Union will therefore have to evaluate the Commission's proposals also taking into account the impact on businesses and on the disbursement of credit on the basis of a cost-benefit analysis of the individual measures proposed. In fact, according to the ABI, "the automatisms in the evaluation of guarantees, the rigidity on the possibility of adopting measures to support small and medium-sized enterprises and enterprises in temporary difficulty, if not adequately considered, would have a pro-cyclical effect, negatively affecting the recovery in deed. During the European legislative process, ABI will provide its collaboration by offering constructive proposals”.
