1 February 2019
On 28 January 2019, the European Systemic Risk Board (ESRB) published its report on macroprudential approaches to non-performing loans (NPLs). The report focuses on the role that macroprudential policy can play in preventing system-wide increases in NPLs and/or in strengthening banks’ resilience to such increases, in response to an EU Council request.
The emergence and accumulation of NPLs become a systemic problem when they affect a considerable part of the financial system, threatening its stability. In the European Union, systemic concerns arose from the abnormally high proportion of NPLs which accumulated on banks’ balance sheets during the crisis and persisted afterwards.