Economics

Structural weaknesses may worsen banks' bad loans – Draghi says

Non-performing loans were worth about €1 trillion worth at end-2016.

21.09.2017

European banks are still carrying bad loans – about €1 trillion worth at end-2016 – and while current economic growth can help the situation, "structural weaknesses still persist", European Central Bank President Mario Draghi said.

"Inadequate internal governance structures in banks, ineffective and costly debt recovery procedures in some member states and misaligned incentives that prevent a quick resolution of NPLs" were all cited by Draghi in a speech in Frankfurt on Friday.