This dissertation was written as part of the LLM in Transnational and European Commercial Law, Banking Law, Arbitration/Mediation at the International Hellenic University.
Firstly, it contains a full analysis of non-performing loans in the European Union economy, a description of the definition and their basic characteristics, what led to the appearance of them, what is the procedure from the moment a loan gets a nonperforming status from the bank, and the severe impact they have on the financial and banking sector of the European Union. Furthermore, there will be a full analysis of the legal context from European Union regarding non-performing loans, how to deal with them and in which way is the banking sector protected from such debtors who are not able to make the required repayments to the bank. Basically, this proposed dissertation will contain in detail, the steps that the banking sector in the European Union takes in order to deal with non-performing loans, and how banks handle these “bad debts” to avoid affecting their balance sheet, cash flows and eventually, stock prices.
The core of this dissertation consists of a precise analysis of measures and procedures that banks use to reduce and eliminate non-performing loans because of the consequences in their balance sheets and cash flow, which end up in financial troubles in general. In addition, there is a description of EU Regulation by EU supervisors and policymakers regarding the fight against non-performing loans, along with specified provisions aiming to bank and debtor legal protection. Moreover, the Non-performing loan strategy, which establishes strategic objectives and approach for banks holding non-performing loans, aiming to effectively manage them and, ultimately, begin to reduce them, is also mentioned. Finally, before the conclusion containing a summary of the main topics, there is a brief analysis of the current difficult situation as a result of the ongoing COVD-19 pandemic, which has brought again on surface non-performing loans, while the European Union is still trying to deal with them after the 2008 global financial crisis.
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