A Strategy for Resolving Europe's Problem Loans
Shekhar Aiyar (),
Jose M Garrido,
Andreas Jobst (),
Kenneth H Kang,
Dermot Monaghan and
No 2015/019, IMF Staff Discussion Notes from International Monetary Fund
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.
Keywords: Nonperforming loans; Banking; Distressed assets; Loans; Solvency; SDN,book value,unsecured debt,expected return,profit sharing (search for similar items in EconPapers)
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