It can only be reduced if more of the credit provided by banks helps to expand those local enterprises that are either direct earners of foreign exchange or those that help conserve on our foreign exchange dependency.
It is therefore necessary to continue towards the completion of the Banking Union and bank resolution framework, including a common backstop, and with harmonisation of national insolvency laws. As the health and economic situation stabilises, additional attention should be paid to the long-term challenges of many European banks, namely low profitability and the issue of sustainability of bank business models.