The members of the EACB welcome the opportunity to comment on the EBA draft GL on the management on management of non-performing and forborne exposures.
We appreciate the intention to consistently align practices for a sound and effective management of NPEs and forborne exposures, however be believe that a number of aspects still need to be clarified and we warn against any mechanistic approach that would ultimately harm the borrowers.
Furthermore, we would suggest to take proportionality in account to a greater extent as the design of certain processes in the draft GL seems rather detailed and oriented towards what would be SIs under the ECB supervision. In this vein a more principle-driven approach would be appropriate, and could be addressed for instance to competent authorities rather than institutions.
Finally, it seems that much of the content of the draft GL was developed with a view to larger commercial or corporate loans, while it does not translate adequately to certain other portfolios, especially retail residential mortgages. This should be adequately taken into account, otherwise unnecessary, inappropriate and burdensome practices may inadvertently be mandated for the management of such mortgages.