Non-performing Loans in the Euro Area

Francesca Arnaboldi

Chapter Chapter 3 in Risk and Regulation in Euro Area Banks, 2019, pp 43-66 from Palgrave Macmillan

Abstract: Abstract Since the progress that banks have made in restructuring has varied among countries, this chapter investigates cross-country heterogeneity in the non-performing loans restructuring process focusing on those countries with the highest non-performing loan ratios. Non-performing loans created by local real estate bubbles have proven easier to deal with than those from corporates or small- and medium-sized enterprises in economies struggling for competitiveness. Restructuring loans for corporates and small and medium-sized enterprises is typically more difficult as these counterparties are often financed by multiple banks, and creditor coordination therefore becomes more complex. Banks in countries with high non-performing loan ratios are expected to continue the process of restructuring, writing off and selling off in the next few years to significantly reduce their risk exposure.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-030-23429-4_3

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DOI: 10.1007/978-3-030-23429-4_3

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