In its Communication to the Spring European Council Driving European Recovery of 4 March 20091, the European Commission undertook to come forward with measures at EU level on responsible lending and borrowing, including a reliable framework on credit intermediation, in the context of delivering responsible and reliable markets for the future and restoring consumer confidence. Responsible lending means that credit products are appropriate for consumers’ needs and are tailored to their ability to repay. This may be obtained through having an appropriate framework in place to ensure that all lenders and intermediaries act in a fair, honest and professional manner, before, during and after the lending transaction. Responsible borrowing implies that – in order to obtain a credit – consumers should provide relevant, complete and accurate information on their financial conditions, and are encouraged to make informed and sustainable borrowing decisions. Most lenders are already subject to EU regulation, for instance through the Consumer Credit Directive2 and the Capital Requirements Directive. Credit institutions must ensure that they have made provisions in their capital holdings that are commensurate with the risks they undertake, including credit risks. When adequately supervised, credit institutions therefore have an incentive to lend responsibly, as the risk profile of their borrowers has an impact on the capital they must hold. Furthermore, it is in lenders’ interests to lend responsibly, in order to avoid damaging and expensive defaults, write offs and home foreclosure procedures. Nevertheless, as evidence from the current economic crisis has shown, there is still significant room for irresponsible lending and borrowing to take place. The Single Market Review of November 2007 and the White Paper on the Integration of EU Mortgage Credit Markets of December 2007 had previously identified certain areas of work of direct relevance to responsible lending and borrowing: pre-contractual information, advice, assessment of creditworthiness, conduct of business rules and credit intermediation.