The current overhang of NPLs in Europe is not exceptional in a historical perspective. However, despite the wealth of experience in NPL resolution accumulated after earlier crisis episodes, resolving Europe’s NPL problem continues to be a thorny issue. Difficulties reflect the chronic nature of the NPL malaise this time round but also the widely differing perceptions about the upside that NPLs may still present. For these reasons, NPL stocks are unlikely to decline fast and the costs of delayed action continue to accumulate. A number of promising resolution schemes – involving specialised asset management companies, specialised servicers, and/or securitisations – have been put forward. To be effective, these schemes will require hard policy choices to be made.
Bojan Markovic is Deputy Director in the Economics, Policy and Governance Department of the EBRD. He is a member of the Steering Committee of the Vienna Initiative, leads the NPL Initiative, and sits on the NPL Expert Group of the European Systemic Risk Board.
He holds Ph.D. and M.Sc. in Economics from the University of Birmingham (UK), and B.Sc. from the Belgrade Faculty of Economics.
Mr Markovic began his central banking career in 2000 at the Bank of England (London), working on monetary analysis and financial stability. He was in charge of the official model for forecasting UK inflation. In 2008, he moved to Goldman Sachs, where he was an executive director in private wealth management, focusing on investment strategies for exchange rates, short- and long-run interest rates, and equities, mainly in G10 countries.
From 2009 to September 2012 Bojan Markovic was the Vice Governor of the National Bank of Serbia in charge of monetary policy, financial markets and payment systems. Until November 2013, he was visiting scholar in the IMF, and external expert on several IMF missions. He is also an Honorary Senior Visiting Fellow at the University of Birmingham.