EU ambassadors today backed new rules to facilitate banks’ sales of bad loans on their books but failed to agree on a reform that would make it easier for lenders to recover assets from borrowers who default, Reuters reported. The proposed rules are part of a wider overhaul of EU banking rules and aim to accelerate banks’ efforts to offload soured loans, which have reduced European banks’ ability to lend to households and companies since the 2007-09 global financial crisis. The agreement reached today is expected to favor the purchase and servicing of so-called non-performing loans (NPLs) “which will lead to the development of efficient secondary markets,” said Romania’s Finance Minister Eugen Teodorovici, who chaired the negotiations among the 28 EU countries. Under the overhaul, which still needs to be finalised in agreement with the European Parliament, financial companies specialized in buying bad loans, such as private equity giant Blackstone and asset manager Cerberus, are set to gain easier access to NPLs across EU states. Read more.
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