As you are aware, some euro area banks still have high levels of NPEs on their balance sheets. In the euro area, the average ratio of NPEs for significant institutions stood at 7.1% at the end of 2015, which is high by international standards.
4 For instance, a proxy for the ratio of NPEs in the US has continued to decline in recent years and amounts to only 1.5% at the end of 2015. A comprehensive policy response to the high levels of NPEs in Europe is necessary, and as part of that, the SSM is working to take stock of supervisory best practices.