But we should not, I believe, panic: greater fragmentation seems inevitable after Brexit. Though, repercussions will not be as bad, as some fear, when we succeed in managing this greater fragmentation constructively – that means without resorting to nationalism that would just be destructive for all of us.
At the end of 2016, the stock of gross NPLs in the EU banking sector was around € trillion. This NPL overhang is tying up bank capital in failed or failing ventures and preventing the efficient flow of new lending to profitable projects. How should banks react to this challenge? First, we should recognise that Europe remains overbanked.