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A Strategy for Resolving Europe's Problem Loans
Author:
Mr. Shekhar Aiyar
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Mr. Wolfgang Bergthaler
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Jose M Garrido null

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Ms. Anna Ilyina
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Andreas Jobst
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Mr. Kenneth H Kang
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Dmitriy Kovtun
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Ms. Yan Liu
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Mr. Dermot Monaghan
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Ms. Marina Moretti
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Series:
Staff Discussion Notes
Volume/Issue:
Volume 2015: Issue 019
Language:
English
Publication Date:
24 Sep 2015
DOI:
https://doi.org/10.5089/9781513591278.006
ISBN:
9781513591278
ISSN:
2617-6750
Pages:
79
Keywords:
SDN; book value; unsecured debt; expected return; profit sharing; NPL ratio; NPL resolution; bank capitalization; area bank; real GDP; bank profitability; capital buffer; Nonperforming loans; Distressed assets; Loans; Solvency; Debt restructuring; Europe; Global
Legal-disclaimer:
Staff Discussion Notes (SDNs) showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate.The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.
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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.
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Cover Staff Discussion Notes
Staff Discussion Notes
ISSN:
2617-6750
Publisher:
International Monetary Fund