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Explicit evidence is required to inform EU policy on non-performing loans


October 20th 2017


EU policy on loans and loan security requires more explicit background data and analysis to show the need of planned legislation.  In current European Commission documents, a number of conclusions are reached without specific supporting evidence.  Substantial improvements in the analysis are needed in the upcoming full Impact Assessments for the intended legislative initiatives.

The IAI has scrutinised the European Commission Inception Impact Assessment on Secondary Markets for Non-Performing Loans.  The preliminary economic assessment projects in particular the benefits of reducing cross-border “spill-over” effects, but fails to support this with explicit data.  Policy options focus exclusively on EU harmonisation and disregard other relevant possibilities.

Similar findings were reached in the IAI scrutiny on the European Commission Inception Impact Assessment on Accelerated Loan Security.  Again little evidence was presented to substantiate the expected benefits, and the potential risks to quality of loans were not assessed. 

In both cases, the immediate added value and need for EU Action was not sufficiently substantiated. The planned full Impact Assessment should include balanced data and analysis to demonstrate the expected impacts.

Link to study

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