Notwithstanding some recent progress in non-performing loan (NPL) disposals, the large stock of NPLs remains a key structural concern in several countries. In addition, overcapacity and cost inefficiencies continue to weigh on bank profitability in certain banking markets.
It is not surprising therefore that in the post-crisis period, the emerging global consensus is increasingly supporting regulatory actions that will strengthen prudential regulation both at the macro and micro level that will need to be integrated appropriately into the national regulatory regimes over time.