Klaus Liebscher: The euro area and the challenges of enlargement Speech by Dr Klaus Liebscher, Governor of the Austrian National Bank, at the European Lawyer Conference “Advising Clients in an Expanded Europe”, Vienna, 29 April 2004. *  *  *  Ladies and Gentlemen, It is a pleasure for me to be with you today.
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.