On 16 June 2021, the European Commission issued a targeted consultation designed to gather evidence on improving transparency and efficiency in secondary markets for non-performing loans (NPLs).
The Commission notes that one of the key actions in fostering secondary markets for NPLs is to improve the quantity, quality and comparability of NPL data. Secondary markets can be broader and more efficient if market participants have more and better data. As part of its strategy to leverage data sources, the Commission is considering targeted changes of the Pillar 3 disclosure requirements under the Capital Requirements Regulation. In line with this the Commission believes that a central data hub could be set up at the EU level to act as a data repository underpinning the NPL market. Such a hub could store anonymised data on NPL transactions and provide post-trade transaction details. Such disclosures could raise the transparency, and thereby the functioning, of secondary markets of NPLs.
The consultation therefore has two main sections, focussing on (i) establishing a data hub at the EU level and (ii) reviewing Pillar 3 disclosures. The first section aims to capture views from stakeholders on the potential establishment of a data hub at the EU level. The responses will help the Commission determine the priorities for policy actions (including regulatory ones). The responses to the second section will allow the Commission to assess the impact of possible changes to EU legislation in the context of banks’ Pillar 3 disclosures. Stakeholders are also invited to draw to the Commission’s attention any further regulatory impediments that are not mentioned in the second part of the consultation which could be tackled through this initiative.
The deadline for comments on the consultation is 8 September 2021.