costs for the financial sector if monetary policy had not responded? we have seen from the recent sharp fall in bank equity prices that the sector is highly sensitive to a weaker - than - expected economic outlook. in that context, our commitment to our price stability mandate is vital to anchor expectations of nominal growth. those who call for a less accommodative monetary policy have to ask themselves what would be the impact on banks ’ lending volumes and loan - loss provisions if output were stagnant and prices falling. more generally, market jitters have particularly focused on banks perceived to have residual weaknesses – in particular those with high stocks of non - performing loans ( npl ) and those perceived to lack sustainable business models. these are challenges that have little to do with the central bank. reducing uncertainty from these sources requires other policymakers and private players to act. two priorities stand out. the first is moving more decisively to deal with legacy assets. progress in npl resolution is still slow when compared with the volume of problem loans. in countries most affected by the crisis 3, the ratio of non - performing exposures to tangible equity and loan loss provisions – the so - called “ texas ratio ” – currently stands at around 100 % for many banks. that undermines confidence in their ability to absorb further losses, creating volatility in the event of economic bad news, as well as hampering loan growth to the real economy. all the preconditions are now there to accelerate npl resolution : npl levels and provisioning have been reviewed by the supervisory arm of the ecb as part of the asset quality review. for the euro area banking sector, the annualised return on equity for the first three quarters of 2015 was 5. 7 % in 2015 compared with 3. 4 % in 2010. see ecb financial stability review, november 2015. the analysis is based on publicly available data for a sample of 60 significant banking groups. countries most affected by the crisis include cyprus, greece, ireland, italy, portugal, slovenia and spain. bis central bankers ’ speeches the challenge now is to speed up the process of writing off and / or disposal. there are various policy measures that can facilitate this process. one is improving insolvency regimes, which help separate viable from non - viable borrowers and enable the valuation of assets to be sold off. another is increasing the efficiency of judicial systems, which allows faster foreclosure of collateral underlying npl portfolios. and in

##2e - db05 – 4166 – 9f09 - e1b26a1c6f1b. stournaras, y. ( 2017b ). the greek economy : prospects and main challenges. speech at the 2nd eu - arab world summit, athens, 10 november, www. bankofgreece. gr / pages / en / bank / news / speeches / dispitem. aspx? item _ id = 482 & list _ id = b2e9402e - db05 – 4166 – 9f09 - e1b26a1c6f1b. stournaras, y. ( 2017c ). the future of the euro area and greece. – article by the governor of the bank of greece yannis stournaras published in the newspaper “ ta nea ”. 11 september. www. bankofgreece. gr / pages / en / bank / news / speeches / dispitem. aspx? item _ id = 469 & list _ id = b2e9402e - db05 – 4166 – 9f09 - e1b26a1c6f1b 1 global gdp growth is estimated by the imf ( 2018 ) to have accelerated to 3. 7 % in 2017 from 3. 2 % in 2016 and is expected to reach 3. 9 % in 2018. 2 see draghi, mario introductory statement, www. ecb. europa. eu / press / pressconf / 2018 / html / ecb. is180308. en. html march 2018. 3 see draghi, mario ( 2018 ) monetary policy in the euro area, speech at the ecb and its watchers xix conference, organised by the institute for monetary and financial stability 14 march 2018, www. ecb. europa. eu / press / key / date / 2018 / html / ecb. sp180314 _ 1. en. html coeure, benoit ( 2018 ) making our monetary union stronger and more resilient. speech at the at the finanzmarktklausur of the cdu wirtschaftsrat, berlin, march www. ecb. europa. eu / press / key / date / 2018 / html / ecb. sp180314 _ 4. en. html 5 see draghi, mario ( 2018 ) monetary policy in