processes facilitate the timely and effective management of problem loans, thereby reducing their negative effects. the proper classification of loans is also essential for the correct representation of the banks ’ situation to stakeholders including external investors and market analysts. it is desirable therefore that banks adopt and apply common prudential principles. in this context, the guidance focuses on clarifying further npl classification issues which have been identified during ongoing supervisory work, for example triggers for ‘ unlikely to pay ’, ‘ days past due ’ counting, and links to forbearance. the ecb does not have explicit accounting powers. moreover, existing standards do not contain specific rules regarding the modalities of write - offs. some supervisors have issued npl write - off guidelines with a view to promoting timelier npl disposal and, more generally, the development of a market for distressed debt. they are – with few exceptions – principles - based, in accordance with the recovery expectations. the guidance is that when loans are deemed uncollectable or unrecoverable, they should be written off in a timely manner. the guidance also addresses qualitative aspects with regard to approaches to assessing 4 / 6 bis central bankers'speeches provisions on an individual and collective basis. furthermore, it puts emphasis on the quality of internal documentation, reporting and disclosures for the processes surrounding this. the use of robust and accurate collateral valuation methods is essential for the proper valuation of npls and for their effective management. it also contributes to the promotion of an active npl market by reducing uncertainty relating to asset values. moreover, a conservative approach to the valuation of collateral ensures that the npls are adequately provisioned, is a key element for the soundness of institutions. in most ( in - scope ) member states, specific rules govern collateral valuation for the financial sector, especially for real estate collateral. typically, these rules are related to professional requirements, but in some cases other specific rules have been drafted pertaining to, for example, appraiser independence, performance and limits on institutions ’ reliance on individual appraisers. in some cases, appraisers are also subject to the supervision of banking or financial market authorities. in this context, the guidance addresses qualitative aspects with regard to governance and procedures linked to valuing collateral, the frequency of valuation updates for npls as well as use of market values plus adequate discounts ( e. g. for liquidation costs ). the valuation of foreclosed assets is also covered. banks

##mic. how do a single monetary policy and different national fiscal and economic policies fit together? to what degree does fiscal policy in the euro area countries need to be harmonised? what can be done to strengthen the capital markets union? and how can the banking union be completed? these questions and talking points affect us directly as eurosystem central banks, and they have a bearing on our work. 1 / 3 bis central bankers'speeches to make it easier to reach out to national authorities and financial institutions in the major euro area countries, the bundesbank now sends staff members to the german embassies in madrid, rome and paris. it is an arrangement that complements the close working relationships we already enjoy with the central banks of these countries. we have found that an intensive exchange of views and ideas can bring differing viewpoints to light early on, besides deepening mutual understanding and trust. for the bundesbank, this is a way of helping to promote collective solutions and reinforcing cooperation within the euro area. digital media have helped us stay in touch during the covid - 19 pandemic. but no matter how well we can communicate by email, telephone and video conferencing nowadays, meeting in person is still a crucial factor in any trusting working relationship. fabian huttner will now play his part in fostering relationships as the bundesbank ’ s representative in madrid. he already has a wealth of knowledge on the various tasks of the bundesbank thanks to his period of training as a civil servant. and his previous position in the digital office saw him work intensively on topics that will shape the future at the bundesbank. i ’ m certain all this experience will stand him in good stead for his new duties. 2 digitalisation in payment transactions ambassador dold, ladies and gentlemen, nowadays, there ’ s no getting around the topic of digitalisation as one that will shape our future. the pandemic, especially, saw people increasingly turn to digital platforms to do their shopping and for work and study. businesses and authorities had no option but to roll out new processes within the tightest of time frames. it showed just how important it is for us to have a reliable digital infrastructure. digitalisation was also the driver of all manner of developments in the financial world during the pandemic. contactless payments by card or smartphone saw major growth, and a booming ecommerce sector increased the uptake of cashless payments. listening to payment service providers