Support for households and consumers

Banking package to support households and businesses

On 28 April 2020, the European Commission adopted a banking package to help facilitate bank lending to households and businesses throughout the EU. This package ensures that banks can continue to lend money, thereby supporting the economy and significantly mitigating the effects felt by citizens and businesses. In applying the full flexibility of the EU’s banking rules and proposing targeted legislative changes, the Commission enables banks to keep on providing liquidity to those in need. The Commission engages with the European financial sector and explores how it can develop best practices and further support citizens and businesses. The banking package includes an Interpretative Communication on the EU’s accounting and prudential frameworks, as well as targeted “quick fix” amendments to EU banking rules.

Tackling non-performing loans

On 16 December 2020, the Commission presented a strategy to prevent a future accumulation of non-performing loans by banks, to prevent their lending capacity from deteriorating and thus ensure that households and businesses across the EU continue to have access to the necessary funding throughout the crisis.

The strategy aims to:

• develop secondary markets for distressed assets – this will allow banks to remove non-performing loans off their balance sheets, while ensuring further strengthened protection for debtors;
• reform rules on corporate insolvency and debt recovery –  uniting various insolvency frameworks across the EU, while maintaining high standards of consumer protection would increase legal certainty and speed up the recovery of value;
• support a network of asset management companies – this helps banks focus on lending to viable businesses and households
• make use of precautionary public support measures – given the circumstances of the current health crisis, authorities can implement precautionary public support measures, where needed, to ensure the continued funding of the economy.

Best practices to provide relief for consumers and businesses

To provide relief for consumers and businesses, and to help further mitigate the impact of the coronavirus pandemic, on 14 July 2020, the Commission welcomed a list of ‘best practices’ agreed by the European financial sector, as well as consumer and business organisations. The list sets out concretely how different market participants can support citizens and businesses throughout the crisis. The best practices cover aspects such as measures to defer payments, enabling safer cashless payments and the granting of swift loans at fair interest rates to help those facing financial difficulties.