Comments on the European Commission’s proposal for a Regulation of the European Parliament and the Council on amending Regulation (EU) No 575/2013 as regards minimum loss coverage for non-performing exposures

25 May 2018

The European Commission (COM) published a proposal for a Regulation on amending Regulation (EU) No 575/2013 as regards minimum loss coverage for non-performing exposures on 14 March 2018. We appreciate the opportunity to submit our comments. 
As frequently stressed in the context of the completion of the Banking Union, the German Banking Industry Committee (GBIC) generally supports the intention in the Action Plan to reduce NPLs. However, we oppose the proposed backstop requirement to prevent inadequate provisioning for future NPLs as being not expedient, because we believe that this approach will result in unintended triggers for management errors.

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