But while banks in the euro area are not at the epicentre of the current crisis, their market valuations were hit hard amid concerns over a further weakening in their profitability prospects.
First, we are observing a decline from the very high level recorded in the post-crisis years – compared with pre-crisis levels, we still have some way to go. For instance, the average non-performing loan ratios of six euro area countries remain in double-digit territory.