The EU states face fines. The EU states were required to implement the directive by the end of 2023. Austria, Bulgaria, Spain, Hungary, the Netherlands, Portugal, and Finland have still not informed the EU Commission of the full implementation into their national law, criticized the EU authority on Wednesday.

Letter Sent

By referring the matter to the Court of Justice, the EU Commission intends to ask the judges to impose financial sanctions on each of these member states. "The amount of the individual sanctions was calculated taking into account the severity and duration of the violation as well as the deterrent effect, which is reflected in the payment capacity of the respective member state." The Commission did not provide information on the amount of the fines. It referred to two letters of formal notice it had sent to the defaulting states in this matter.

According to the EU Commission, the EU directive aims to develop a well-functioning secondary market for non-performing loans by establishing rules for the authorization and supervision of credit purchasers and managers. Furthermore, the directive contains a set of harmonized criteria intended to enable credit service providers to market non-performing loans across borders.

Warning Letter for Austria

In another infringement procedure, the EU Commission called on Austria and four other EU states to fully implement the amendments to the directive on the recovery and resolution of banks. In this matter, the EU authority sent a letter of formal notice, a reasoned opinion, to the affected countries.

"These amendments concern the supervisory treatment of globally systemically important institutions and the loss absorption and recapitalization capacity of banking groups," the Commission stated. The amendments are important to ensure full alignment in the EU with the Financial Stability Board's standards on total loss-absorbing capacity (TLAC) for globally systemically important institutions (G-SIIs). The amendments are particularly necessary to adequately reflect the risk of G-SIIs in the EU towards their subsidiaries in third countries and to further improve the ability of the largest EU banking groups to withstand financial shocks. Without implementing these technical measures, it will not be possible to achieve the required level of harmonization in the EU framework for banking supervision.

(APA/Red)

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