Published Paper Details:

Abstract Non-performing loans (NPLs) weaken bank balance sheets, constrain credit, and amplify economic downturns. When NPLs accumulate, they complicate both going-concern supervision and failure-time resolution. This paper synthesizes the legal mechanisms used across jurisdictions to manage NPLs throughout the lifecycle of banking distress--prevention, early intervention, recovery planning, and resolution. It explains the architecture of creditor rights and enforcement frameworks, specialized out-of-court restructuring tools, regulatory and accounting treatments, transfer and securitization structures, asset management companies (AMCs or "bad banks"), and resolution powers under modern regimes. It also examines cross-border frictions, state aid and competition safeguards, consumer protection interfaces, and operational execution challenges. The paper closes with practical design principles for policymakers and bank leadership to reduce NPL stocks, shorten resolution timelines, and preserve value during crises.