Late last year, we re-engaged BlackRock to update credit loss projections for banks’ loan portfolios up to 2016, and to study the efficiency of banks’ procedures in managing nonperforming loans. The efficient use of the backstop during recapitalization and resolution has left a buffer of around € € 9 billion, should additional capital needs arise.
Moreover, the sale of non-core assets and the exploitation of synergies arising from mergers could add some € billion to the buffer. A “code of conduct” for banks’ dealings with distressed borrowers is being drawn up and will be implemented as of 2015.