At the end of 2016, the stock of NPLs in the EU banking sector totaled around EUR 1.0 trillion. Whilst some reductions have been achieved, EU and Eurozone stocks of NPLs remain comparably higher than a number of other jurisdictions. Moreover, action until as of late has been led by national initiatives as opposed to specific EU and/or Eurozone action. This is now set to change with the introduction of a definitive NPL Action Plan that was announced on 11 July 2017 by the current Consilium of the EU. The following Client Alert, assesses the contents of the NPL Action Plan, what it means for market participants and policymakers and how it ties into other EU-27 regulatory reform workstreams, including the EU's Capital Markets Union. The Client Alert also assesses how the NPL Action Plan ties into Banking Union specific regulatory reforms, including the on-going fine-tuning of the EU-27's Single Rulebook as it is applied within the Banking Union.

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