European Central Bank (ECB) top supervisor Andrea Enria said on Thursday that 40% of eurozone banks are not complying with the ECB’s expectations on bad loans, as reported by Reuters.
“It’s too early to relax provisions,” Enria added. “In normal recessions, banks start releasing provisions once we are close to the peak of bankruptcies. But now we haven’t even started seeing the materialisation of asset quality problems.”
Market reaction
These comments don’t seem to be having a significant impact on market sentiment. As of writing, the Euro Stoxx 50 Index was down 0.26% on the day at 3,992.
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