The Resolution of NPLs in the Euro Area

Event: ADB-ECB Workshop on NPL Resolution in Asia and Europe

The Resolution of NPLs in the Euro Area

10 February 2020

Author / Speaker:

Maciej Grodzicki, European Central Bank - Other materials by the author

Reiner Martin, European Central Bank - Email the author | Other materials by the author

The paper outlined the extent and examined the factors underlying the NPL problem in the euro area. Over a decade after the global financial crisis, a large stock of nonperforming loans continues to be an important concern in the euro area, with 114 euro area banking institutions holding 759 billion euros of gross NPLs corresponding to an NPL ratio of 5.2% in September 2017. The paper highlighted the regional dimension of NPLs in Europe and stresses the need for a comprehensive approach to speedy NPL resolution, encompassing supervisory, macroprudential, and structural measures as well as coordination across European countries. It reviewed the current obstacles to NPL resolution in the euro area and the elements underpinning a comprehensive strategy, placing emphasis on asset management companies and the benefits of regional cooperation.

Geographical Focus:

Regional - Europe

Type of Content:

Learning Event

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