First, there is a positive and robust correlation between financial depth and economic growth in countries with small and intermediate financial sector. Second, beyond a threshold there is  8  a negative effect of financial sector; that threshold is when credit to the private sector reaches 100% of GDP.
Moreover, addressing asset quality issues has also been one of the key priorities for ECB Banking Supervision since its inception. In 2014 a Comprehensive Assessment encompassing an asset quality review (AQR) assessed the appropriateness of the valuation of NPLs under existing accounting standards, using a sampling approach. Shortcomings in bank accounting practices and policies identified in that exercise led to additional provisioning needs.