In Italy, which is one of the countries where the problem of non-performing loans (NPL) is most acute, the flow of new NPLs relative to total outstanding loans has fallen to the levels prevailing before the crisis. The stock of NPLs is also falling quite significantly, and disposals currently under way will lead to a further drop over the coming months.
The pressures on fixed exchange rate regimes mounted as foreign investors slowed the pace of new capital inflows, and domestic businesses sought increasingly to convert domestic currencies into foreign currencies, or, equivalently, slowed the conversion of export earnings into domestic currencies.