A series of targeted inspections that commenced in the second half of 2012 resulted in significant value adjustments in respect of non-performing loans. Between 2009 and 2014 coverage ratios rose by 5 percentage points for the major banks and by almost 11 points for the others; today these ratios are higher than the European average.
A financial crisis is no longer a “tail risk” with a low probability of occurrence. It should rather be regarded as a “normal risk” that can materialize at any time and at any place in new and diverse forms. A capacity to pick up promptly on the build-up of fresh imbalances calls for preemptive and proactive surveillance by central banks and supervisory authorities.