Europe lags behind US in NPL sales

Author: Olly Jackson | Published: 25 May 2018

Europe needs to make changes to fully address its non-performing loan (NPL) problem, according to panellists at the Association for Financial Markets in Europe's (Afme) NPL conference in Brussels on Tuesday 22 May. If not, the problem could become even worse than it is now.

The US government took control of mortgage brokers Freddie Mac and Fannie Mae in September 2008, signalling the start of the financial crisis and setting in motion one of the most difficult economic periods in recent years. Ten years on, after what has been said to be the slowest recovery ever, US banks have managed to get rid of many of their non-performing bank loans (NPLs) and rebalanced lopsided balance sheets. So why does Europe still have an NPL problem?

In 2010, Europe and the US were relatively at the same level. NPLs made up 5.3% of all US bank loans and five percent of total...