In the decade-plus since the 2008 recession, the non-performing loans (NPLs) industry matured in many parts of the world, with loan sales and securitizations becoming commonplace for banks and a broadening pool of investors partaking in NPL transactions. But just as the NPL market hit its stride, a global pandemic threatens to disrupt the balance. How can issuers and banks navigate the post-COVID-19 NPL landscape?
Amid the COVID-19 pandemic, companies across all industries are scrambling to adapt to the new world of remote working. Banks and financial institutions are especially challenged. Those that are slow to leverage technology might get left behind should another pandemic or society-shattering event disrupt the world again.
It can’t be overstated: there’s an enormous volume of financial products exposed to LIBOR. A significant proportion is at risk of becoming invalid in less than two years. Unquestionably this will shake up the global debt markets if banks, issuers and other stakeholders don’t take action to transition out of LIBOR right now.