The recent 20th Global ABS in Barcelona, which attracted structured finance and capital markets experts, placed attention on the Italian NPLs market and the opportunities for this market to provide in the next future a financial tool for resolving the NPLs overhang that affects Italian banks.
Indeed, the recent introduction of the Italian guarantee scheme (“GACS”, “Garanzia Cartolarizzazione Sofferenze”) is actually a measure introduced by the Italian law decree No. 18 of 14 February 2016, as converted with modifications into the Italian law No. 49 of 8 April 2016 (the “Decree”), to help stabilise the Italian banking sector – by reducing the country’s huge stock of bad loans. The objective of the GACS is to increase the credit worthiness of senior asset-backed securities so as to attract a wider range of investors and incentivise banks to workout non-performing loans and improve their liquidity.