Banking and Companies, ABI Executive Committee notes the improvements made to the text of the Addendum to the Guidelines of the ECB – SSM on impaired loans
The ABI Executive Committee on impaired loans
The Executive Committee of the ABI, having evaluated the technical-legal analysis presented by the Director General, noted the improvements made to the text of the Addendum to the Guidelines of the ECB – SSM on impaired loans.
In particular, the Executive Committee notes that the Addendum, as published on March 15, 2018, does not impose general obligations on banks and does not produce mandatory legal effects and therefore the Addendum is not a first pillar measure.
The Addendum provides an indication of the expectations of the European Supervision on how the banks will assess the specific future risks to which they are exposed.
The Executive Committee also highlights the need for clarification of the necessary connections between the contents of the Addendum and the application of accounting principles and public reporting obligations.
The Executive Committee underlines that the contents of the Addendum will have to be assessed and legally framed in relation to changes in the European regulatory framework, in connection with the Commission’s proposals on the treatment of exposures to impaired loans, also in relation to their entry into force, overcoming the misalignments envisaged today.
In fact, it is essential to ensure consistency between the different levels of regulatory sources and the full connection between the various European Authorities.
The Executive Committee expressed the hope that a stabilization and simplification of the European regulatory framework will be achieved as soon as possible, a condition for ensuring the right balance, not yet achieved, between stability and growth needs and giving European banks legal certainty.
In this sense, it highlights the need for the European Parliament and the Council of the Union to evaluate the Commission ‘s proposals 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.
The automatisms in the evaluation of guarantees, the rigidity on the possibilities of adopting measures to support small and medium enterprises and enterprises in temporary difficulty, if not adequately considered, would have a procyclical effect, negatively affecting the current recovery.
During the European legislative process, ABI will provide its collaboration by offering constructive proposals.
March 21, 2018
Source ABI Italian Banking Association
