Does Europe Have What it Takes to Finish the Banking Union?

Can reforms aimed at shoring up the trees of the financial system fail to see the forest? The answer, when it comes to non-performing loans (NPLs) in the EU, seems to be “yes”, for the existing measures and proposals that seem to pay attention to each minute detail fail, in our view, to get the bigger picture. This happens despite that picture’s (worrying) implications is relatively clear, and its potential solutions, are relatively accessible. Non-performing loans (“NPLs”) are by no means a new financial challenge. This is an article about choices. It analyzed the framework of choices (or a menu of choices to choose from to deal with NPLs) in light of experiences in Ireland, Germany, and Spain. It also looked at the case of a reluctant chooser in Italy, the complexities of a post-choice stage in Spain, and structured a proposal for dealing with NPLs at the European level in light of these experiences.