ECB report on NPL securitisation finds government guarantee schemes act as creators of NPL transaction markets

Article summary

The European Central Bank (ECB) has published an empirical study of securitisations of non-performing loans (NPLs) as part of its occasional paper series. The paper provides an overview and typology of NPL securitisations issued by large banks in the euro area since 2017 and proposes a concrete framework to compare and assess NPL securitisations across multiple dimensions. The authors conclude that government guarantee schemes may not act solely as incentives, but as active creators of new NPL transaction markets.