The European Central Bank (ECB) today announced further steps in its supervisory approach for addressing the stock of non-performing loans (NPLs) in the euro area. The approach follows the work that has already been undertaken in this area, namely the banks’ NPL reduction strategies, and the addendum for provisioning for new NPLs. It creates a consistent framework to address the stock of NPLs as part of the supervisory dialogue through bank-specific supervisory expectations aimed at achieving adequate provisioning of legacy NPLs thereby contributing to the resilience of the euro area banking system as a whole.

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