This episode of The Sound of Economics focuses on non-performing loans (NPLs), a pressing issue for Europe's banks. The financial crisis and the recession that followed left European banks with € 1 trillion of NPLs. This has a negative impact on banks, borrowers, and the wider European economy.

A range of experts offer insights into why NPLs are a challenge for banks, and why they are a problem for the European economy as a whole. They also discuss cultural differences in our relationship with debts, and how NPLs affect borrowers and undermine entrepreneurship.

NPLs are a big issue for the European economy, and the show's guests explore how this issue can be solved. They explain what NPL workout entails, and assess Europe's progress in streamlining the process. Asset Management Companies (AMCs), so-called "bad banks" are part of the solution, and this episode asks if a European approach to AMCs can be effective. And finally, since both banks and borrowers are negatively affected by NPLs, we address the difficult question of who should bear the loss.