EP seeks involvement in shaping ECB guidelines for non-performing loans

The European Central Bank (ECB) must include the European Parliament in the decision-making process regarding new guidelines for non-performing bank loans, stated the President of the European Parliament in a letter to the ECB President, which was published by Italian media on Tuesday.

The ECB proposed last week an amendment to the guidelines on non-performing loans, according to which banks should reserve larger amounts for new non-performing loans starting next year, and at the beginning of next year, they could also amend the guidelines on reducing non-performing loans.

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Italian banks hold nearly 30 percent of about 915 billion euros in non-performing loans in the eurozone, and the proposals have angered the government in Rome, which is asking the ECB to soften them after the consultations end on December 8.

The President of the European Parliament, Antonio Tajani, wrote to Draghi that he is very concerned about the procedure for initiating the initiative on new non-performing loans.

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– I seriously wonder whether it is possible to impose… specific additional obligations… on legal entities under supervision if other participants in the law-making process have not been appropriately involved beforehand, Tajani wrote according to the cited letter.

– I urge you to take all necessary steps to ensure appropriate respect for the Parliament’s jurisdiction and thereby avoid inter-institutional disputes on this matter, Tajani wrote to Draghi in a letter cited by Italian media.