FRANKFURT (Reuters) – Euro zone banks are set to face a further deterioration of their loan book and many lenders have failed to adjust their credit control norms to acknowledge the unique nature of the pandemic, European Central Bank supervisory chief Andrea Enria said.
“There are signs that the asset quality deterioration caused by the pandemic may not yet have peaked, as it has been somewhat masked and certainly delayed by the extraordinary pandemic-related public support measures,” Eurofi Magazine quoted Enria as saying on Wednesday.
“Crucially, credit risk controls at some banks have not been sufficiently tailored to the specificities of this shock, meaning that they do not allow for a timely and proactive assessment of credit risk developments by looking past the public support measures,” Enria added.
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