A Strategy for Resolving Europe's Problem Loans
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Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.
Summary:
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.
Series:
Staff Discussion Notes No. 2015/019
Subject:
Asset and liability management Banking Debt restructuring Distressed assets Financial institutions Financial sector policy and analysis Loans Nonperforming loans Solvency
Notes:
See Also Technical Background Note
English
Publication Date:
September 24, 2015
ISBN/ISSN:
9781513591278/2617-6750
Stock No:
SDNEA2015019
Pages:
79
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