The use of robust and accurate collateral valuation methods is essential for the proper valuation of NPLs and for their effective management. It also contributes to the promotion of an active NPL market by reducing uncertainty relating to asset values.
It highlighted the necessity of applying the new rules (including those on state aid) with flexibility and caution during the changeover to the new regime, when public intervention is no longer admissible but the banks have not yet put in place sufficient buffers to absorb losses without undesired effects on systemic stability.