The European Central Bank's banking supervision head, Daniele Nouy, said Cypriot banks need to apply "additional and persistent" efforts to reduce levels of nonperforming loans, Reuters reported Oct. 16, citing an interview gave to the Cyprus News Agency.
Nonperforming loans, or NPLs, consist of more than 40% of loans in Cyprus' banking sector, one of the highest in the EU, Reuters wrote.
Nouy said in an interview that the high level of NPLs remains a key vulnerability for the Cypriot economy and banking industry so it is "essential" that banks speed up efforts to reduce their piles of bad loans.
Countries have expressed dissent toward recent ECB proposals on how to deal with bad loans, mainly from states with huge amounts of toxic debt, the report noted.
The central bank on Nov. 30 will hold a public consultation on new guidelines that will make eurozone banks shell out more cash to cover sour loans.
Nouy said, "Work is still in progress regarding the best way to deal with the stock of NPLs."