Nadege Jassaud and Edouard Vidon
The unfolding of the financial crisis in parts of Europe has highlighted a number of challenges which can be analysed through the prism of NPLs. These included the discrepancies…
Abstract
Purpose
The unfolding of the financial crisis in parts of Europe has highlighted a number of challenges which can be analysed through the prism of NPLs. These included the discrepancies across supervisory regimes, the limitations of macro-prudential supervision and the diversity of NPL resolution approaches.
Design/methodology/approach
The authors review policy lessons from the crisis in dealing with the NPL problem.
Findings
The paper highlights some key recommendations – the need for intrusive supervision, strong macro-financial surveillance and NPL resolution approaches that provide the right incentives.
Originality/value
These recommendations can help inform the current debate regarding regulatory and structural initiatives to tackle NPLs.