European Banking Coordination “Vienna 2.0” Initiative reports on Basel III implementation and NPLs in emerging Europe

By EBRD  Press Office
@ebrd

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A 13 March press release after a meeting of the European Banking Coordination “Vienna 2.0” Initiative referred to the adoption of reports from two Working Groups, one on the impact of Basel III rules on emerging Europe and the other on the resolution of non-performing loans (NPLs).

The report on Basel III implementation highlights a number of implications of the new rules for emerging markets, particularly in the liquidity management area, and offers several recommendations to address them. The report points out that future regulation and calibration should better take account of the emerging market perspective and market development needs.

The report on NPLs in Central, Eastern and South-eastern Europe finds that possibilities exist for stimulating resolution to support recovery. The Working Group on the resolution of NPLs calls for a pro-active cooperative approach to deal with the NPL problem with distinctive roles for each stakeholder: the relevant country authorities should press ahead with removing burdensome regulatory, tax and legal impediments to NPL resolution identified in the report; regulators should tighten supervision appropriately so as to eliminate incentives to let NPLs linger; banks should step up their collective effort to speed up NPL resolution; and avenues for out-of-court debt restructuring and corporate rehabilitation negotiations between debtors and creditors should be explored.

 
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