European banks are getting into trouble with some of their loans due to the corona crisis. According to an estimate by the European banking authority EBA, the financial institutions have added up to more than 1 trillion euros in ‘problem loans’, with debtors who will soon be unable to repay. That writes The Financial Times (FD) Monday.
The EBA estimate is a first attempt to identify the impact of the corona crisis on the sector. The problems could match those after the debt crisis, according to the regulator.
The number of non-performing loans fell from 7.1 to 3.1 percent between the end of 2014 and the end of 2019, but the current crisis could cause this share to rise again.
According to the EBA, banks now have enough money to handle a crisis, the chairman thinks. Nevertheless, the regulator argues that part of the money released in Europe for a recovery fund should go to the banks.
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