This report looks at non-performing loans (NPLs) from a macroprudential angle. The accumulation of NPLs on banks’ balance sheets comes to the attention of macroprudential authorities when they weaken a significant part of the financial system, threatening its stability or impairing one or more of its core functions, such as the provision of credit to the real economy. Various imperfections, including unaddressed externalities, economies of scale and coordination failures, institutional distortions (stemming from the accounting, regulatory and tax treatment of NPLs or the judicial and market structures needed for their efficient resolution) and moral hazard vis-à-vis the providers of the banks’ safety net, may call for policy action on the management of NPLs. While the tools needed to address these imperfections and their consequences may not be mainly macroprudential, the trade-offs that must be struck when using such tools have an important macroprudential component, thus requiring an active involvement of macroprudential authorities – not least as assessors of the overall consistency and cumulative systemic impact of the undertaken policies, in normal times as well as during crises and in their aftermath.
{"title":"Approaching Non-Performing Loans from a Macroprudential Angle","authors":"J. Suárez, Antonio Sánchez Serrano","doi":"10.2139/ssrn.3723327","DOIUrl":"https://doi.org/10.2139/ssrn.3723327","url":null,"abstract":"This report looks at non-performing loans (NPLs) from a macroprudential angle. The accumulation of NPLs on banks’ balance sheets comes to the attention of macroprudential authorities when they weaken a significant part of the financial system, threatening its stability or impairing one or more of its core functions, such as the provision of credit to the real economy. Various imperfections, including unaddressed externalities, economies of scale and coordination failures, institutional distortions (stemming from the accounting, regulatory and tax treatment of NPLs or the judicial and market structures needed for their efficient resolution) and moral hazard vis-à-vis the providers of the banks’ safety net, may call for policy action on the management of NPLs. While the tools needed to address these imperfections and their consequences may not be mainly macroprudential, the trade-offs that must be struck when using such tools have an important macroprudential component, thus requiring an active involvement of macroprudential authorities – not least as assessors of the overall consistency and cumulative systemic impact of the undertaken policies, in normal times as well as during crises and in their aftermath.","PeriodicalId":227276,"journal":{"name":"ESRB: Advisory Scientific Committee Reports (Topic)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128835462","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A. Sapir, M. Hellwig, M. Pagano, V. Acharya, L. Balcerowicz, Arnoud Boot, Markus K. Brunnermeier, C. Buch, Ieke van den, Charles W. Calomiris, D. Gros, Dario Focarelli, A. Giovannini, Andreas Ittner, D. Schoenmaker, Charles Wyplosz
The European macro-prudential policy framework operates at two levels. First, the ESRB has a legal responsibility for macro-prudential oversight in the EU. Second, various national and EU authorities have responsibility for the implementation of macro-prudential policy. The creation of a European banking union is an important innovation within this two-level structure. In response to this innovation, this paper makes two key points. First, the ECB should be in charge of macro-prudential policies conferred by the Capital Requirements Regulation and Directive. Within the ECB, macro-prudential decisions should be taken entirely by the Governing Council, while micro-prudential decisions should be prepared by the Supervisory Board. Second, the ESRB remains the only EU-wide body in charge of macro-prudential supervision, responsible for all financial activities. The ESRB's effectiveness could be strengthened by creating a post of Managing Director, who would carry out the policy determined by the General Board and would be responsible to the General Board for the management of the ESRB. JEL Classification: G28
欧洲宏观审慎政策框架在两个层面上运作。首先，ESRB对欧盟的宏观审慎监管负有法律责任。其次，各国和欧盟当局有责任实施宏观审慎政策。建立欧洲银行业联盟是这一两级结构中的一项重要创新。针对这一创新，本文提出了两个关键点。首先，欧洲央行应负责《资本要求监管与指令》(Capital Requirements Regulation and Directive)赋予的宏观审慎政策。在欧洲央行内部，宏观审慎决策应完全由管理委员会做出，而微观审慎决策应由监事会做出。其次，ESRB仍是欧盟范围内唯一负责宏观审慎监管的机构，负责所有金融活动。设立一个常务董事的职位可以加强ESRB的效力，该职位将执行总委员会确定的政策，并就ESRB的管理向总委员会负责。JEL分类:G28
{"title":"The Consequences of the Single Supervisory Mechanism for Europe's Macro-Prudential Policy Framework","authors":"A. Sapir, M. Hellwig, M. Pagano, V. Acharya, L. Balcerowicz, Arnoud Boot, Markus K. Brunnermeier, C. Buch, Ieke van den, Charles W. Calomiris, D. Gros, Dario Focarelli, A. Giovannini, Andreas Ittner, D. Schoenmaker, Charles Wyplosz","doi":"10.2139/ssrn.3723323","DOIUrl":"https://doi.org/10.2139/ssrn.3723323","url":null,"abstract":"The European macro-prudential policy framework operates at two levels. First, the ESRB has a legal responsibility for macro-prudential oversight in the EU. Second, various national and EU authorities have responsibility for the implementation of macro-prudential policy. The creation of a European banking union is an important innovation within this two-level structure. In response to this innovation, this paper makes two key points. First, the ECB should be in charge of macro-prudential policies conferred by the Capital Requirements Regulation and Directive. Within the ECB, macro-prudential decisions should be taken entirely by the Governing Council, while micro-prudential decisions should be prepared by the Supervisory Board. Second, the ESRB remains the only EU-wide body in charge of macro-prudential supervision, responsible for all financial activities. The ESRB's effectiveness could be strengthened by creating a post of Managing Director, who would carry out the policy determined by the General Board and would be responsible to the General Board for the management of the ESRB. JEL Classification: G28","PeriodicalId":227276,"journal":{"name":"ESRB: Advisory Scientific Committee Reports (Topic)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128545902","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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