Italy launches new framework for NPL securitisation

Author: | Published: 24 Aug 2017

The member state may have one of the highest level of bad loans in the EU, but recent regulatory advances have proven key in making the market more efficient for investors

In 2016 the Italian government adopted several initiatives and reforms, providing for, inter alia, the introduction of a state guarantee on the senior tranche of asset-backed securities (ABS) collateralised by Italian non-performing loans (NPLs) via the Garanzia Cartolarizzazione Sofferenze (GACS). The tool openly incentivised the disposal of NPLs from Italian banks through securitisation transactions. The introduction of the GACS was coupled with other measures including (i) the improvement of Italian bankruptcy and enforcement proceedings, aimed at reducing the length of the recovery procedure and at simplifying the auction process; and (ii) the introduction of new forms of security interest to streamline the enforcement process, by bringing it outside the courts (reducing both the court workload and the lengthy timing...



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