In other countries, we are still looking at largely unchanged and stubbornly high ratios. In about a third of all EU countries, average NPL ratios are still in the double digits. To appreciate what this means, it is instructive to compare European NPL ratios with those in the US or Japan.
Here, the NPL ratio in 2016 stood at roughly 1.5 per cent on average. So the fundamental problem – the very heterogeneous distribution of NPLs across EU member countries – remains unsolved. Therefore, we need to make further progress on this front before we can establish a European deposit insurance system.