EC official: focus on bad loans will drive bank consolidation

Supervisory and market pressure to tackle NPLs will force some banks out of the market


The growing regulatory focus on non-performing loans (NPLs) in the European Union is likely to drive more cross-border consolidation in the banking sector, a European Commission official has said.

The Council of the EU unveiled an action plan on NPLs – estimated at more than €800 billion in the EU – in July 2017, and the EC responded in March 2018 with a proposed Pillar 1 capital backstop for banks deemed to have inadequate provisioning levels.

“Helped by the co-ordinated action under the

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