Opinion: Beyond country risk: A comprehensive approach to address banks’ vulnerabilities

Gregorio De Felice

Journal of Risk Management in Financial Institutions, 2017, vol. 10, issue 1, 45-47

Abstract: Although better than in 2014, the results of the stress tests failed to reassure the markets, at least in the short run. Asset quality and banks’ profitability remain top of investors’ worries. In order to address banks’ vulnerabilities, a comprehensive approach is needed, involving an overhaul of banks’ business models and the reduction of legacy non-performing loans (NPLs). Moreover, regulators and authorities should continue working towards better regulatory harmonisation and the completion of the Banking Union.

Keywords: stress tests; capitalisation; profitability; credit quality; non-performing loans (NPLs); economic growth; country risk; idiosyncratic risk (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2017
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