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Date of publication
6 September 2021

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06/09/2021 - The economic consequences of the COVID-19 crisis and related challenges for financial resilience have raised concerns about banks’ accumulation of higher levels of non-performing loans (NPLs) on their balance sheets that could undermine their ability to intermediate credit and support economic recovery. These concerns give a renewed relevance to NPL resolution strategies in at least some OECD jurisdictions to restore banks’ financial soundness and strengthen their resilience.

This report evaluates a range of possible responses to address large-scale NPL stocks, considering complementary internal recovery and market-based disposal solutions. In this sense, the study proposes a framework to encourage a non-performing loan stock reduction strategy that would effectively balance the incentives, costs and risks of key stakeholders including national authorities (and taxpayers), banking institutions, investors and other market participants.

See also

The COVID-19 crisis and banking system resilience, 2021

COVID-19 Government Financing Support Programmes for Businesses, 2020

Global Financial Markets Policy Responses to COVID-19, 2020