In the short term, the economic exit out of the Covid pandemic poses a real challenge to the asset quality of banks. I have always been intrigued by the term 'non-performing loan'. It has a subtle British understatement to it.
This is especially refreshing to someone like me coming from a Calvinist country where the word for debt – schuld – is the same as the word for guilt. But still, we are talking about a situation where someone may not pay back your loan. For a bank, that's potentially life-threatening, because it can erode your capital.