Alerts Archive

LMA publishes new regulatory insight paper on supporting the competitiveness of the EU banking sector

On 27 October 2026, the LMA published a new member insight paper, Supporting a Competitive EU Banking Sector: Non-performing loans, leveraged lending, and responsible risk-taking.

Against the backdrop of the European Commission’s work on the competitiveness of the EU banking sector, the paper considers how the prudential and supervisory framework can remain robust while supporting responsible risk-taking and financing the real economy.

Drawing on LMA member experience, the paper focuses on two areas of particular importance to the loan markets:

• the permanent Pillar 1 prudential backstop for non-performing exposures
• the ECB’s Guidance on leveraged transactions 

The paper sets out options for making both measures more proportionate and risk-sensitive, giving banks greater flexibility to support viable borrowers, manage their balance sheets, and finance the real economy without weakening bank resilience.

It builds on recommendations the LMA has already shared directly with EU policymakers as part of our wider engagement on the forthcoming package on the competitiveness of the EU banking sector.

Read our full insight paper here.