First, the pass-through of our monetary stimulus to bank lending conditions has been remarkable. Interest rates have fallen markedly across a broad spectrum of asset classes and credit markets since June 2014. As a result, euro area firms and households have experienced more favourable borrowing conditions.
As of September 2015, non-performing exposures stood at € billion, representing 43.6% of total exposures. Hence, the more effective management of non-performing exposures, avoiding the pitfalls of regulatory forbearance or overenforcement alike, will bring about multiple benefits for banks, households, businesses and the society at large. In the process, it will unlock funding to the real economy, bolstering investment and employment.