Authority: Risk in bank balance sheets is increasing

The European Banking Authority (EBA) is warning of increasing risks in bank balance sheets as a result of the Corona crisis. In the second quarter of 2020, the volume of loans at risk of default rose again for the first time after years of decline, the authority said on Friday. The amount of deferred loans has grown noticeably, and banks rated significantly more loans as potentially critical. As soon as the government guarantees and the moratoria on loan repayments expire, this will be reflected in the valuation of the loans on bank balance sheets. For its study, the EBA looked at the balance sheets of 129 banks in continental Europe and six British institutions.

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