Alongside the structural reforms, using idle public property to attract foreign direct investment through appropriate land use legislation and speeding up privatization, there is an urgent need to address the private debt overhang problem, in order to facilitate the recovery through a stronger pick-up in lending.
On the one hand, the high stock of NPEs reduces bank profitability and thus constrains the supply of credit, which primarily affects bank-dependent SMEs. On the other hand, high NPEs 4/7  BIS central bankers' speeches  delay corporate restructuring and thus thwart the ability of viable firms to finance new investment projects.