or special accounting or fiscal advantages. A centralized approach takes the form of a central organization/agency such as a "bad bank" (also called "Asset Management Company"). In practice, both approaches can be used simultaneously, as illustrated by the European Commission's action plan on NPLs, while some authors have argued that systemic crisis generally require a more centralized approach. Proactive measures to tackle NPLs include: Impose more transparency on NPLs reporting by banks Accounting framework (such as IFRS9) Prudential Supervision of banks including the levels of capital requirements and buffers. Proactive incentives for banks to offer forbearance to distressed consumers and other debt relief mechanisms Setting up Asset Management Companies (AMCs) or bad banks. These companies use public or bank funds to remove NPAs from the bank books. For example, the Korea Asset Management Corporation purchased as much as 80% of bad loans at market rate following the Asian crises. Fostering secondary markets for NPLs that can offer the mechanism and liquidity required to write off bad loans. Many companies see a business opportunity in buying NPL's. Buying NPL's from financial institutions with a discount, can be a lucrative business. Companies pay from 1% to 80% of the total loan and become the legal owner (creditor). The discount depends on the age of the loan, secured/ unsecured, age debtor, personal/ commercial debt, area of residence, etc. Securitization of NPLs (ie. packaging a bulk of NPLs into a pooled financial product such as a covered bond or asset backed security) may help preserve the market value of the NPL package to a level closer to their nominal or real economic value, thus lessening the cost of selling NPLs for banks. Corporate Governance Non-performing loans in the context of the COVID-19 pandemic crisis Although the 2020 has seen an actual decrease of non performing loans, the issue is expected to represent a major challenge for the banking industry in the post-COVID-19 era. The ECB has warned that the amount of NPLs in the Eurozone could reach up to 1.4 trillions euros of bad loans, however academic literature suggest the future rise of NPLs will be primarily driven by the pace of the economic recovery after COVID-19, and in particular the level of unemployment. In the context of the COVID-19 crisis, the deactivation of debt payment moratoria and tax deferral are also likely to cause an increase of NPLs. To prepare for the likely