Free Trial

E-MINI S&P (M2): Remains Above Its Recent Lows


Correction Higher Extends


Head And Shoulders Reversal


Labour market data due at 7:00BST

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
MNI (London)
By Christian Vits
     FRANKFURT (MNI) - European banks still have to tackle non-performing loans
while the overall shape of the sector shows improvements, European Central Bank
President Mario Draghi said Tuesday.
     "Though NPL levels have been coming down for significant institutions --
from around 7.5 percent in early 2015 to 5.5 percent now -- the problem is not
yet solved," Draghi said in a speech in Frankfurt. 
     "Many banks still lack the ability to absorb large losses, as their ratio
of bad loans to capital and provisions remains high," he added.
     Against this background, there is "no room for complacency", since
improvements are likely to have been driven, in part, by the improved economic
situation, Draghi noted. 
     "It is therefore crucial that further reforms to de-link banks from
sovereigns do not lose steam, notably completing the other pillars of banking
union," he said.
     With a view to negative interest rates, Draghi stressed that there has been
"little evidence" that negative interest rates are undermining bank
profitability, "an issue which has caused a lot of concern" because of possible
risks for financial stability and the monetary transmission.
     "This neutral impact of negative rates is largely due to the general
equilibrium effects of monetary policy that we have explained many times: when
policy is accommodative, the main components of profitability largely offset
each other, since the positive impact of a stronger economy on loan-loss
provisions largely cancels out any negative effect on net interest income,"
Draghi said.
--MNI Frankfurt Bureau; +49 69 97782671; email:
[TOPICS: M$E$$$,M$X$$$,MC$$$$,M$$EC$]
MNI London Bureau | +44 203-865-3812 |

To read the full story

Why Subscribe to

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.