A Strategy for Resolving Europe's Problem Loans
by Mr.Shekhar Aiyar, Mr.Wolfgang Bergthaler, Jose M Garrido, Ms.Anna Ilyina, Andreas Jobst, Mr.Kenneth H Kang, Dmitriy Kovtun, Ms.Yan Liu, Mr.Dermot Monaghan, Ms.Marina Moretti · 2015
ISBN: 1513591274 9781513591278
Category: Business & Economics / Industries / Financial Services
Page count: 79
Europe’s banking system is weighed down by high levels of non-performing loans (NPLs), which are holding down credit growth and economic activity. This discussion note uses a new survey of European country authorities and banks to examine the structural obstacles that discourage banks from addressing their problem loans. A three pillared strategy is advocated to remedy the situation, comprising: (i) tightened supervisory policies, (ii) insolvency reforms, and (iii) the development of distressed debt markets.