A Strategy for Resolving Europe's Problem Loans

Author/Editor:

Shekhar Aiyar ; Wolfgang Bergthaler ; Jose M Garrido ; Anna Ilyina ; Andreas Jobst ; Kenneth H Kang ; Dmitriy Kovtun ; Yan Liu ; Dermot Monaghan ; Marina Moretti

Publication Date:

September 24, 2015

Electronic Access:

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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. 15/19

Subject:

Notes:

See Also Technical Background Note

English

Publication Date:

September 24, 2015

ISBN/ISSN:

9781513591278/

Stock No:

SDNEA2015019

Format:

Paper

Pages:

79

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