Repercussions of high NPL levels cross borders: through banks’ balances sheet cross-exposures, through economic spillovers in the face of subdued credit supply and hindered monetary policy transmission and inevitably through market perception. The systemic nature of such risks is heightened by widespread low bank profitability, increasing capital requirements and a still incipient NPL secondary market. NPLs are, indisputably, a European problem.
The Central Bank has been instrumental in the drafting of several legislations governing AML and CFT, including the National Ordinances on the Reporting of Unusual Transactions and National Ordinance on Identification when Rendering Services. These legislations were enacted in 1996 and lastly amended in 2009.