A report published by the European
Central Bank in mid-June has said that banks in the eurozone are
facing realised and expected losses of up $200 billion in household
bad debts because of the global financial crisis. In all, the
eurozone banking sector has $6.52 trillion in outstanding household
loans, including $4.65 trillion in mortgages.

Total losses, realised and expected, will
equal around $650 billion so far – with further additional losses
of more than $280 billion expected in 2010 and beyond due to the
ongoing recessive nature of Europe’s economy.

The ECB wrote: “The deterioration in the
macro-financial environment has continued to test the shock
absorption capacity of the euro area financial system. The
profitability of euro area [large banks] has been eroded and the
prospects for a significant turnaround in the short term are not