NPL Management Inside ReoCo

Abstract

ReoCo is an instrument used by banks for credit recovery. The financial crisis of 2008 has increased the number of non-performing loans (NPLs) and the need to collect debt. Debt collecting or credit recovery is fundamental because it allows banks to increase their liquidity and to use it for their core activities. The financial crisis triggered write-downs and losses on NPLs due to real estate collaterals. For this reason, the necessity of credit recovery increased in order to stop losses. The study describes the use of ReoCos for credit recovery, with a focus on Italy.