{
  "title": "Reviving Credit in the Euro Area",
  "publication": "IMF Blog, November 23, 2015",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2015/11/23/reviving-credit-in-the-euro-area",
  "canonical": "https://www.imf.org/en/blogs/articles/2015/11/23/reviving-credit-in-the-euro-area",
  "overlayPath": "/en/blogs/articles/2015/11/23/reviving-credit-in-the-euro-area/index.md",
  "summary": "Title: Reviving Credit in the Euro Area",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Title: Reviving Credit in the Euro Area\n- Authors: Jean Portier, Luca Sanfilippo\n- Date: November 23, 2015\n- Context: Summary findings from the Global Financial Stability Report on nonperforming loans (NPLs) in the euro area."
    },
    {
      "heading": "Key findings",
      "content": "- A stock in excess of €900 billion of nonperforming loans continue to clutter the European banking system, impeding economic growth.\n- Current inefficiencies—long foreclosure times and insolvency procedures—contribute to a gap between the value of loans on bank balance sheets and the price investors are willing to pay.\n- Time to foreclose is used as a proxy for effective insolvency regimes in the analysis.\n- Slow foreclosure times impede rapid NPL resolution, leading to higher NPL ratios.\n- Example: In Italy, the current time to foreclose of four years is twice the current euro area average.\n- Example: Italy’s average NPL ratio of about 11% is 1.6 times the euro area average."
    },
    {
      "heading": "Quantitative estimates and scenarios",
      "content": "- Creating incentives for the effective restructuring or resolution of nonperforming loans by achieving a foreclosure time of one year maximum in each country can create a new lending potential of about €600 billion for the euro area as a whole.\n- The potential positive impact in the most vulnerable countries of the euro area, where collateral foreclosure time is higher on average, is upwards of €373 billion in extra lending."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Countries should consider improving insolvency regimes as a tool to reduce the number of non-performing loans and help banks lend again.\n- Upgrading legal systems and ensuring a reliable legal environment and an efficient judicial system can maximize the value of NPLs, reduce the value gap, and give banks greater incentive to remove NPLs from their balance sheets.\n\nSource: Reviving Credit in the Euro Area, Jean Portier and Luca Sanfilippo, November 23, 2015.\n\n---\n\n\n References\n\n- Global Financial Stability Report,\n\nSource: https://www.imf.org/en/blogs/articles/2015/11/23/reviving-credit-in-the-euro-area"
    }
  ],
  "bullets": [
    "[Markdown version](/en/blogs/articles/2015/11/23/reviving-credit-in-the-euro-area/index.md)",
    "[Structured JSON version](/en/blogs/articles/2015/11/23/reviving-credit-in-the-euro-area/index.json)",
    "[Bundle manifest](/en/blogs/articles/2015/11/23/reviving-credit-in-the-euro-area/bundle-manifest.json)",
    "Authors: Jean Portier, Luca Sanfilippo",
    "Published: November 23, 2015",
    "Title: Reviving Credit in the Euro Area",
    "Authors: Jean Portier, Luca Sanfilippo",
    "Date: November 23, 2015",
    "Context: Summary findings from the Global Financial Stability Report on nonperforming loans (NPLs) in the euro area.",
    "A stock in excess of €900 billion of nonperforming loans continue to clutter the European banking system, impeding economic growth.",
    "Current inefficiencies—long foreclosure times and insolvency procedures—contribute to a gap between the value of loans on bank balance sheets and the price investors are willing to pay.",
    "Time to foreclose is used as a proxy for effective insolvency regimes in the analysis.",
    "Slow foreclosure times impede rapid NPL resolution, leading to higher NPL ratios.",
    "Example: In Italy, the current time to foreclose of four years is twice the current euro area average.",
    "Example: Italy’s average NPL ratio of about 11% is 1.6 times the euro area average.",
    "Creating incentives for the effective restructuring or resolution of nonperforming loans by achieving a foreclosure time of one year maximum in each country can create a new lending potential of about €600 billion for the euro area as a whole.",
    "The potential positive impact in the most vulnerable countries of the euro area, where collateral foreclosure time is higher on average, is upwards of €373 billion in extra lending.",
    "Countries should consider improving insolvency regimes as a tool to reduce the number of non-performing loans and help banks lend again.",
    "Upgrading legal systems and ensuring a reliable legal environment and an efficient judicial system can maximize the value of NPLs, reduce the value gap, and give banks greater incentive to remove NPLs from their balance sheets.",
    "[Global Financial Stability Report,](http://www.imf.org/External/Pubs/FT/GFSR/2015/02/index.htm)"
  ],
  "alternates": {
    "markdown": "/en/blogs/articles/2015/11/23/reviving-credit-in-the-euro-area/index.md",
    "json": "/en/blogs/articles/2015/11/23/reviving-credit-in-the-euro-area/index.json",
    "bundleManifest": "/en/blogs/articles/2015/11/23/reviving-credit-in-the-euro-area/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-08-28T01:59:29.546Z"
}