Securitisation could solve the
ongoing European non-performing loans (NPL) problem. But there
can only be full resolution if European Central Bank (ECB) and
European Commission rules converge, amid fears that the low
hanging fruit has already been picked.
Constance Usherwood, prudential director
at the Association for Financial Markets in Europe (Afme) said
that the NPL market is making positive progress, but to
continue this way, more needs to be done.
"Banks have been securitising NPLs, but
one or two participants I have spoken to say that the low
hanging fruit has now been picked," she said.
NPLs in Europe have steadily declined in recent years,
reducing from 7.5% of total loans at the height of the debt
crisis in 2012 to 3.7% by the end of last year. There are fears
that this progress could come to a standstill now the easiest
bad loans have been securitised and regulatory uncertainty