Op-Ed: “The Role of Asset Management Companies against a possible surge in Non-Performing Loans in the EU” by Concetta Brescia Morra and Alberto Pozzolo
At the dawn of the COVID-19 pandemic, the Basel Committee, the European Banking Authority (EBA), and the European Central Bank (ECB) introduced many extraordinary measures to help financial intermediaries in sustaining the real economy, such as the provision of public guarantees on new loans granted and moratoria on outstanding loans. While these measures have proven very successful in addressing the short-term impact of the crisis, they cannot be permanent. Eventually, they will need to be removed, possibly causing significant financial problems to several firms and their lenders.
While non-performing loans (NPLs) in the EU have remained relatively stable in recent months, some signs are emerging that a surge is likely once the m