Open Book Policy in NPL sales: why buyer transparency is now a governance issue

Christian Groß-Hetzel, Investment Director Central Europe at Riverty, has been a prominent voice in reframing this discussion. In a recent analysis, he argues that Open Book approaches fundamentally change the character of NPL transactions. “With an Open Book policy, we move away from one-off transactions that end at signing and towards structures where both sides can learn and develop from every transaction.” This perspective reflects a broader shift in the market: transparency is no longer about additional reporting, but about governance, confidence, and explainability. 

Why transparency matters now 

The renewed focus on buyer transparency is not driven by ideology, but by structural change. NPL portfolios have become more complex; approval processes more interdisciplinary and regulatory expectations more explicitly. Price alone rarely provides sufficient insight into whether a transaction aligns with long-term risk strategy and governance standards. 

At the same time, internal scrutiny has intensified. Risk committees, audit functions and supervisory boards increasingly ask how assumptions were derived, how resilient they are and what happens if reality deviates from plan. In this environment, opacity creates friction, not only externally, but within institutions themselves. 

Groß-Hetzel captures this shift succinctly: “At its core, an Open Book policy turns an NPL sale into a feedback instrument for the credit business itself.” Transparency, in this sense, supports institutional learning rather than simply facilitating execution. 

Pricing logic as a governance question 

From a seller’s perspective, insight into a buyer’s pricing logic, cost assumptions, and operational approach supports internal alignment long before a transaction closes. It enables credit risk, finance, and governance teams to discuss decisions based on shared reference points rather than headline numbers. 

This does not imply that sellers replicate or validate buyer models. Instead, it allows them to understand the drivers behind valuations and to articulate why a specific bid is plausible within defined risk parameters. 

Over time, such insight contributes to more disciplined portfolio segmentation, more realistic provisioning discussions, and a clearer distinction between assets suited for sale and those better managed internally. 

Transparency beyond closing 

In regulated environments, accountability does not end with closing. Questions may arise long after a transaction has settled, during audits, supervisory reviews, or internal retrospectives. 

Where transparency mechanisms exist, sellers can explain outcomes with reference to documented assumptions and structural drivers. Deviations from the plan become interpretable rather than problematic. Governance discussions shift from defending decisions to contextualising them. The objective is not to exert control post-sale, but to maintain interpretative clarity over time. Transparency preserves the ability to explain, even when outcomes differ. 

Common misunderstandings 

Despite growing acceptance, Open Book policies are often misinterpreted. 

One common concern is that transparency weakens negotiating positions. In practice, the opposite is often true. Clear logic reduces defensive discounting driven by uncertainty and narrows expectation gaps between buyers and sellers. 

Another misconception is that transparency equates to full disclosure. Open Book approaches focus on material assumptions and value drivers, not proprietary detail. 

Finally, transparency is sometimes treated as a reporting exercise. Its real value lies in being embedded as an operational and governance capability, not as an afterthought. 

Strategic takeaways 

Buyer transparency in NPL sales has evolved into a governance issue. It supports explainability, internal alignment, and long-term credibility without prescribing specific transaction outcomes. By shifting the focus from one-off pricing to sustainable performance logic, Open Book approaches help institutions maintain control over their decisions, even after assets have left the balance sheet. 

Or, as Christian Groß-Hetzel puts it, transparency is less about opening the books and more about opening the conversation.