October 13, 2020 1:21 pm

ECB bank supervisor raises warning against NPL wave

Total inventory could rise to 1.4 trillion euros

Andrea Enria has warned Europe’s banks of a sharp increase in the number of defaulted loans. The financial institutions are urged to take a closer look at their balance sheets and identify possible problem loans. “The banks should take an honest look at their loan books and see, which of their customers will survive the crisis,” the head of the ECB’s banking supervisory board explained. This is the only way to prevent a wave of NPLs in the euro zone.

The European Central Bank has already simulated the possible consequences of the Corona crisis for the institutions, Andrea Enria points out. In the worst case, the stock of non-performing loans could rise to 1.4 trillion euros – and thus even exceed the impact of the financial crisis. According to Enria, it is currently still too early to rule out such a scenario. Investing

This post was written by Jens Secker

(Image rights: istockphoto.com/littleclie)

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