Past Event

Is there a way out of non-performing loans in Europe?

At this event we looked at the issue of non-performing loans in Europe. The event also saw the launch of the latest issue of "European Economy – Banks, Regulation and the Real Sector."

Date: July 6, 2017, 12:30 pm Topic: European Macroeconomics & Governance

Video and audio recording


SUMMARY

The European and national regulatory authorities are concerned about the repercussions of the growing impaired assets and their consequences on financial stability in the near future. On the 6th of July, Bruegel, together with European Economy – Banks Regulation and the Real Sector and SWP-Berlin held an event on non-performing loans. This event presented the issue of European Economy – Banks, Regulation and the Real Sector (issue 2017.1) on the main exit strategies from non-performing loans on the table, with a particular focus on the set up of a state-backed Asset Management Companies (AMCs). The roadmap consists of enhanced supervision and reforms in the restructuring, insolvency and debt recovery frameworks as to increase recovery value from NPLs and reduce the length of work-out procedures. In the short-term, restructuring banks with high levels of impaired assets and developing secondary markets were defined as priorities.

While there is a large stock of NPLs to resolve, it is also important to stop the stocks from growing – for some countries, the current default rate is higher than the cure rate and the underlying factors have been pointed out as low growth, high unemployment, lack of disposable income or high interest rate margins. On the resolution side, the issues of asset composition – non-tradable assets may not present a lemons problem but a “patience problem”- and pricing were deemed of key importance. As it was discussed, real economic value is not defined if there is no market. The formation of secondary markets, on the other hand, has been hindered by asymmetries in legal regimes, governance or state-aid rules.

Despite the fact that the NPLs are concentrated in few countries, the possibility of spill-overs makes the case for the set-up of a European AMC, a project filled with open questions – the mutualisation of risks or even the decision of which banks should be allowed to transfer assets to AMC outside of the state-aid envelope illustrate what boils down to be a political willingness issue.

Event notes by  Inês Goncalves Raposo

 

Event Materials

Presentation by Giorgio Barba Navaretti and Giacomo Calzolari

Presentation by Maria Demertzis

Presentation by Aimilios Avgouleas

Schedule

Jul 06, 2017

12:30-13:00

Check-in and lunch

13:00-13:10

Opening

Giorgio Barba Navaretti, Professor of Economics University of Milan and chief Editor European Economy - Banks, Regulation and the Real Sector

Maria Demertzis, Deputy Director

13:10-13:20

Introduction

Giacomo Calzolari, Professor of Economics, University of Bologna, and Editor of European Economy-Bank Regulation and the Real Sector

13:20-14:20

Panel discussion

Chair: Maria Demertzis, Deputy Director

Emilios Avgouleas, Chair in International Banking Law and Finance. University of Edinburgh

Martin Hellwig, Director (em.), Max Planck Institute for Research on Collective Goods

Helen Louri, Head of the Department of Economics, Athens University of Economics and Business

Laura von Daniels, Associate, German Institute for International and Security Affairs (SWP)

14:20-15:00

Discussion with the audience

15:00

End

Speakers

Emilios Avgouleas

Chair in International Banking Law and Finance. University of Edinburgh

Giorgio Barba Navaretti

Professor of Economics University of Milan and chief Editor European Economy - Banks, Regulation and the Real Sector

Giacomo Calzolari

Professor of Economics, University of Bologna, and Editor of European Economy-Bank Regulation and the Real Sector

Maria Demertzis

Deputy Director

Martin Hellwig

Director (em.), Max Planck Institute for Research on Collective Goods

Helen Louri

Head of the Department of Economics, Athens University of Economics and Business

Laura von Daniels

Associate, German Institute for International and Security Affairs (SWP)

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

matilda.sevon@bruegel.org

Read about event

Past Event

Past Event

Climate change and the role of central banks

What connections exist between central banks and climate change, and what are the resulting implications?

Speakers: Emanuele Campiglio, Paul Hiebert, Pierre Monnin, Kjell G. Nyborg, Luiz Awazu Pereira da Silva, Mario Quagliariello, Mattia Romani, Paweł Samecki and Dirk Schoenmaker Topic: Energy & Climate, European Macroeconomics & Governance Location: Narodowy Bank Polski, Świętokrzyska 11/21, 00-919 Warsaw Date: September 16, 2019
Read article Download PDF

Policy Contribution

European Parliament

Hybrid and cybersecurity threats and the European Union’s financial system

The authors document the rise in hybrid threats and cyber attacks in the European Union. Exploring preparations to increase the resilience of the financial system they find that at the individual institutional level, significant measures have been taken, but the EU finance ministers should advance a broader political discussion on the integration of the EU security architecture applicable to the financial system.

By: Maria Demertzis and Guntram B. Wolff Topic: European Macroeconomics & Governance, European Parliament, Finance & Financial Regulation, Testimonies Date: September 12, 2019
Read article Download PDF More on this topic More by this author

Policy Brief

Collective action in a fragmented world

International collective action is in search of a new paradigm. It cannot rely anymore on global binding rules supported by universal institutions. New forms of cooperation have emerged in a number of fields. Europe should equip itself to be an effective player in this new global game. This calls for internal governance reforms.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: September 11, 2019
Read article More on this topic More by this author

Opinion

Economic priorities for new EU leadership

Europe is no longer in crisis mode. However, it remains vulnerable; it is unprepared and it is procrastinating. Following European elections this May, new leaders are about to take their positions at the main European institutions for the next 5 years. They have the power in their hands to take action. But more importantly, they have the power to convene 28 states, which, if united, can play a significant global role. What are the urgent challenges that require collective European action?

By: Maria Demertzis Topic: European Macroeconomics & Governance Date: September 10, 2019
Read article

Blog Post

How long is the head table?

An empirical assessment of concentration in global collective action

By: Jan Mazza and Jean Pisani-Ferry Topic: Energy & Climate, Global Economics & Governance Date: August 28, 2019
Read article More on this topic More by this author

External Publication

La Banca centrale europea

This external publication delves into the new responsibility given to the European Central Bank: supervision on banks in the euro-area. It tells its history and illustrates its functions, structure and responsibilities and the exceptional answers to respond to the "perfect storm" of the crisis.

By: Francesco Papadia Topic: European Macroeconomics & Governance Date: July 31, 2019
Read article More on this topic

Blog Post

Talking about Europe: Die Zeit and Der Spiegel 1940s-2010s

An on-going research project is seeking to quantify and analyse printed media discourses about Europe over the decades since the end of the Second World War. A first snapshot screened more than 2.8 million articles in Le Monde between 1944 and 2018. In this second instalment we carry out an analogous exercise on a dataset of more the 500 thousand articles from two German weekly magazines: Die Zeit and Der Spiegel. We also report on the on-going work to refine the quantitative methodology.

By: Enrico Bergamini, Emmanuel Mourlon-Druol, Francesco Papadia and Giuseppe Porcaro Topic: European Macroeconomics & Governance Date: July 18, 2019
Read article Download PDF More on this topic

Policy Brief

The European Union energy transition: key priorities for the next five years

The new members of the European Parliament and European Commission who start their mandates in 2019 should put in place major policy elements to unleash the energy transition. It is becoming economically and technically feasible, with most of the necessary technologies now available and technology costs declining. The cost of the transition would be similar to that of maintaining the existing system, if appropriate policies and regulations are put in place.

By: Simone Tagliapietra, Georg Zachmann, Ottmar Edenhofer, Jean-Michel Glachant, Pedro Linares and Andreas Loeschel Topic: Energy & Climate Date: July 9, 2019
Read about event More on this topic

Past Event

Past Event

Eurozone agreement: a mini revolution?

What does the new Eurozone budget do, and what does it not do? What are its strengths and weaknesses?

Speakers: Bruno Le Maire and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: July 8, 2019
Read article More on this topic More by this author

Podcast

Podcast

Director's Cut: Priorities for the new ECB president

In this Director's Cut of 'The Sound of Economics', Guntram Wolff talks to two of the authors of Bruegel's memo to the new ECB president, Maria Demertzis and Grégory Claeys, to specify the most important issues at the beginning of this eight-year cycle and to clarify the parameters within which the new incumbent will have to work.

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: July 4, 2019
Read article Download PDF

Policy Brief

The threats to the European Union’s economic sovereignty

Memo to the High Representative of the Union for Foreign Affairs and Security Policy. The authors describe the current context and the increasing interlinkages between economics and power politics and the role to play in reinforcing and defending Europe’s economic sovereignty.

By: Jean Pisani-Ferry and Guntram B. Wolff Topic: European Macroeconomics & Governance, Global Economics & Governance Date: July 4, 2019
Read article Download PDF More on this topic

Policy Brief

Preparing for uncertainty

Memo to the president of the European Central Bank. Grégory Claeys, Maria Demertzis and Francesco Papadia present the challenges that the next ECB president will face during the upcoming mandate, reinventing monetary policy in a system riddled with uncertainties.

By: Grégory Claeys, Maria Demertzis and Francesco Papadia Topic: European Macroeconomics & Governance Date: July 3, 2019
Load more posts