The action plan supports the fostering of a secondary market for NPLs and the creation of Asset Management Companies (aka bad banks).
[13] Proactive measures to tackle NPLs include: Although the 2020 has seen an actual decrease of non performing loans, the issue is expected to represent a major challenge for the banking industry in the post-COVID-19 era.
[28] Meanwhile the European Commission has revised its action plan in December 2020[29] by focusing on speeding up the fostering of a secondary market for NPLs and to offer support for national Asset Management Companies.
Early research of NPLs was dominated by internal procedures and specific attributes of the lending banks in approving, controlling and monitoring the loans to ensure they remain active and not impaired.
In recent years, research showed that property loans made up the highest percentage of NPLs in countries like Malaysia and US.