Progress in tackling legacy issues such as high levels of non-performing loans, which have fallen by 30% since 2014, and the framework for resolution, including the implementation of the minimum requirement for own funds and eligible liabilities, have also helped to increase buffers and reduce risk and thereby the scope for risk sharing.
The crisis demonstrated how important it is for banks to build up capital buffers in good times. In my view, the current economic and financial conditions call for more action by macroprudential authorities to enhance the resilience of the banking sector and ensure the system has buffers in place that can be released in times of stress.