Article 16(2) of the EBA and ESMA Regulations provides that the EBA and ESMA should carry out an analysis of ‘the potential related costs and benefits’ of any Guidelines they develop. This analysis should provide an overview of the findings regarding the problem to be dealt with, the solutions proposed and the potential impact of these options.
A. Problem identification
As part of the establishment of the comprehensive strategy to address the issue of non-performing loans (NPLs) within the European Union, Directive (EU) 2021/2167 enables credit institutions to better deal with loans that become non-performing by selling the credit to a credit purchaser, who may task a credit servicer with its administration.
According to Article 5(1)(c) of Directive 2021/2167, the credit servicer’s management or administrative organ should have adequate knowledge and experience, as a whole, to conduct the business in a competent and responsible manner.
To further harmonise the assessment of adequ
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