Does Europe Have What it Takes to Finish the Banking Union? Non-Performing Loans (NPLs) and Their Hard Choices, Non-Choices and Evolving Choices

48 Pages Posted: 22 Dec 2017

See all articles by Marco Lamandini

Marco Lamandini

University of Bologna - Department of Business Law

Giuseppe Lusignani

University of Bologna - Department of Management

David Ramos Muñoz

Universidad Carlos III de Madrid

Date Written: December 03, 2017

Abstract

Post-crisis European reforms have focused on 'micro' measures, like shoring up financial institutions, ensuring their solvency and sound supervision, and the resolution to deal with them in a crisis. However, bold 'macro' measures to deal with problems that cut across the whole financial sector remain elusive. Non-Performing Loans (NPLs) are a clear example, and until a solution is found for them the Banking Union will only be half-finished. This article focuses on the experience by different countries, such as Ireland, Germany or Spain, to propose a strategic decision-making matrix to devise a solution to deal with NPLs at an EU level, and also discusses some country cases in detail to illustrate both the risks associated to inaction (Italy), and to the interactions between NPL policy, and investor protection policy (Spain).

Keywords: non-performing loans, assets, bad bank, asset management company (AMC), NAMA, SAREB, FMSA, financial crisis, banks, Banking Union, governance

JEL Classification: G18, G21, G23, G28, G34, G38, K22, K23

Suggested Citation

Lamandini, Marco and Lusignani, Giuseppe and Ramos Muñoz, David, Does Europe Have What it Takes to Finish the Banking Union? Non-Performing Loans (NPLs) and Their Hard Choices, Non-Choices and Evolving Choices (December 03, 2017). Columbia Journal of European Law, Forthcoming; European Banking Institute Working Paper Series 2017 - no. 17. Available at SSRN: https://ssrn.com/abstract=3091944

Marco Lamandini (Contact Author)

University of Bologna - Department of Business Law ( email )

via San Giacomo, 3
Bologna, Bologna
Italy

HOME PAGE: http://www.diritto.unibo.it

Giuseppe Lusignani

University of Bologna - Department of Management ( email )

Via Capo di Lucca 34
Bologna, 40126
Italy

David Ramos Muñoz

Universidad Carlos III de Madrid ( email )

126, Getafe
Madrid, 28903
Spain

HOME PAGE: http://www.uc3m.es

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