The ECB released a new consultation document on NPEs, which set quantitative guidance for banks’ provisioning. The consultation document is non-binding; however, banks are expected to explain any deviations. The ECB aims at avoiding high NPE stock situations for the future. The consultation document could be a potential negative for Italian banks for the following reasons: (i) a step-up in the UTP and PD coverage; (ii) potential additional NPL fire sales, despite the Regulator being confident this would not happen as the new rules apply to new NPE. IT could be an exception to this view as the length of the foreclosure often exceed the calendar provisioning.