Development of secondary markets for non-performing loans and distressed assets and protection of secured creditors from borrowers’ default

20 October 2017

German Banking Industry Committee welcomes the possibility to comment on EU-Commissions Consultation on the development of secondary markets for non-performing loans and distressed assets and protection of secured creditors from borrowers’ default. A crucial factor in creating and evaluating loan securities is being able to recover their value swiftly. This holds both outside and during insolvency proceedings and is a given in banking supervisory law. We welcome insofar the endeavour of the European Commission to create an improved framework for recovering value from loan securities. Nevertheless, we do not regard the proposals to introduce an “accelerated loan security” as being adequate for appropriately balancing the interests of secured parties and collateral givers while at the same time improving recovery of value.

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