On the supervisory side, NPL resolution has been designated as one of the top priorities of the Single Supervisory Mechanism. ECB Banking Supervision has prepared an extensive draft guidance document on NPL, expressing supervisory expectations with regard to governance, management, recognition and valuation of NPLs, which was discussed at length earlier today.
The powers of the banking supervisors in the EU are, however, legally limited. For instance, Accounting Standards, including on the imposition of provisions for non-performing assets, are not set by supervisors.7 11 / 13  BIS central bankers' speeches  Other elements are likely to be needed for a comprehensive solution.