A year ago our research showed Europe had an €800 billion stock of bad loans. In our latest Global Financial Stability Report we show that the problem has now grown to more than €900 billion. This stock of nonperforming loans is concentrated in the hardest hit economies, with two-thirds located in just six euro area economies. The European Central Bank’s Asset Quality Review confirmed this picture, which revealed that the majority of banks in many of these economies had high levels of nonperforming assets (see chart 1).
Filed under: Advanced Economies, Economic outlook, Economic research, Europe, Financial Crisis, growth, IMF, International Monetary Fund, Investment | Tagged: bank lending, debt overhang, euro area, European Central Bank, GFSR, Global Financial Stability Report, inflation, interest rates, liquidity, nonperforming loans | Leave a comment »