In its latest Financial Stability Review, published yesterday afternoon, the ECB has taken a less gloomy view on the potential losses that euro-zone banks still have to face relative to a previous IMF estimate published in April. Still, even under this more optimistic scenario euro-zone banks have so far incurred, at best, just half of their potential losses. (See Chart 1.) The message from the various ranges of estimates is that bank deleveraging still has a long way to go.
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