Country Case Studies on Resolving Problem Loans in Europe: Crises, Policies and Institutions

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

Country Case Studies on Resolving Problem Loans in Europe: Crises, Policies and Institutions

11 February 2020

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Description: 

This paper featured European country case studies and drew possible policy lessons for Asia regarding NPL resolution and NPL market development, with a focus on national policy choices in response to the rise in NPLs and excess private debt following the global financial crisis. It also assessed the effectiveness of national strategies including the roles of bank-led and market solutions in addressing national impediments to NPL resolution. The EU and bilateral financial support to bank recapitalizations, structural reforms guided by the IMF and EU, the creation of AMCs, and NPL market development were some of the key policies that helped achieve NPL reduction targets. The case studies of resolution strategies presented a number of lessons for emerging Asia. Europe’s policy experience highlights the need for a comprehensive NPL definition and supervisory guidance and underlines the role of insolvency and restructuring frameworks.

Type of Content: 
Learning Event

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