LSE IGA hosted a seminar where Paul Herbert and Reiner Martin of the European Central Bank presented the new Financial Stability Review. Paul argued that while systemic risks in the Eurozone were broadly contained, important issues remained and the risk of "japanisation" was there. New research also highlighted that large interconnected investment funds, many also linked to large banks, are becoming systemic.
Reiner outlined the rising awareness over the persisting problem of high level of non performing loans (NPLs), currently amounting to a staggering at 9% of GDP, with wide variations. The solutions often should come from players outside the financial sector (governments, legal system changes etc. ), although incentives below the supranational level were not always there.