The level of non-performing loans (NPLs) at European Union banks will be in the spotlight as the region's biggest banks face stress tests on Friday.
"We have 1 trillion (euro) of NPLs - it's a big figure," Andrea Enria, chairman of the European Banking Authority (EBA), told CNBC, ahead of stress tests published Friday night which will be a key measure of the region's banks' financial strength.
"The level has started decreasing in all countries. The point is the pace of adjustment. Are we adjusting the levels fast enough? You don't want to be too fast, because then you have a massive capital impasse and fire sale of assets, but you don't want to be too slow, because then the banks would be unable to lend and remain unprofitable for long periods of time."