A&O Shearman | FinReg | Report on Loan Enforcement Laws Across the EU Published
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  • Report on Loan Enforcement Laws Across the EU Published

    12/03/2019

    The European Commission has published a study analyzing the individual and collective loan enforcement laws in the 28 EU member states. The report, authored by Dr Steffek, University of Cambridge, sets out in anonymized format the results of the study on member state loan enforcement laws from the perspective of the bank as lender enforcing a loan contract against a company, a sole trader, a partnership or a consumer as borrower. The report analyses common elements and differences identified between member state laws and discusses some of the shared legal approaches and characteristics, as well as best practices. Finally, the report makes recommendations as to how reforming existing frameworks can improve enforcement of bank loans to improve access to debt finance by lowering the cost of debt finance, strengthening bank stability by assisting banks to better manage non-performing loans and enhancing the fair treatment of lenders and borrowers. The recommendations provide different options for addressing weak bank loan enforcement, including:

    • reforms to various areas of laws to harmonize insolvency laws, credit security laws and private enforcement laws;
    • more directed reforms aimed particularly at avoidance actions or at private liquidation of secured assets without the involvement of state authorities;
    • establishment of a framework directive harmonizing options and providing modules to choose from; and
    • creation of an EU regime that would be optional for parties to opt into.


    View the report.

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