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BFW digitaal / RBF numérique 2019/3

  • Wednesday 19/6/2019

    The issue of non-performing loans (NPLs) in Europe continues to be a focal point of attention for the banking system, both at national and European level. This article explores the origins and causes of the accumulation of NPLs in Europe and explains why they have been and continue to be an important challenge that needs to be tackled. The reduction of NPLs in the EU banking sector is in fact encouraging and substantial progress is being made. Nevertheless, NPLs remain a significant challenge to the profitability and viability of EU banks, and economic growth at large. Attention also needs to be drawn to the clear and important EU dimension to reducing NPLs, as well as preventing their renewed build-up in the future, given the interconnectedness of the banking system of the EU and particularly of the euro area. In this respect, there is a clear connection with the "Action Plan to Tackle Non-Performing Loans In Europe", which was endorsed by finance ministers in the ECOFIN Council in July 2017. The contribution also touches upon the link with the wider agenda of advancing risk reduction and risk sharing in the EU. Most importantly, the contribution elaborates upon the actions that the European Commission has taken to address NPLs, what their main objectives are and how they could affect the EU banking sector.

  • Wednesday 19/6/2019

    This is a report of the conference on ‘Quantitative Easing’, organised by Het Financieel Forum West-Vlaanderen, which took place on April 2nd, 2019 in Kortrijk.

  • Wednesday 19/6/2019

    Masterclass at the Universiteit Antwerpen, April 4th, 2019.

  • Wednesday 19/6/2019

    This is a report of the panel discussion, following the masterclass of Mathias Dewatripont, at the Universiteit Antwerpen, on April 4th, 2019.

  • Wednesday 19/6/2019

    Recent economic indicators are not very encouraging for those hoping that inflation in the euro area will soon return to the ECB's 2% target. Economic growth decelerated sharply in 2018 and the previous acceleration in inflation was completely reversed in the final months of the year. Core inflation has not yet picked up, although stronger wage increases would have justified hopes of such a development. However, the slowdown in consumer demand growth has probably prompted entrepreneurs to reduce their profit margins rather than increase prices.

     

    Low inflation in the eurozone also reflects the adjustment process whereby peripheral euro area countries continue to make up for competitiveness losses that occurred before the euro debt crisis. This is still not complete and implies that their inflation rates should remain below that of Germany. Consequently, as long as German inflation remains below 2%, average eurozone inflation cannot really get close to 2%.

     

    A stronger stimulation of the German economy, and in particular of German consumption, could accelerate the process by stimulating German inflation. But such a stimulus is unlikely. A significant acceleration of German inflation to above 2% is therefore also unlikely. As other large euro area countries will have to keep their inflation levels below German levels for a long time to come in order to restore their competitiveness, a return to average inflation in the euro area close to the ECB's 2% target is likely to be a very long-term effort.