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European banks need "urgent and comprehensive action" to address legacy nonperforming loans and bloated, inefficient business models that threaten to cripple them with too-low profits, the International Monetary Fund said Wednesday.In its latest assessment of global financial stability, the IMF said weak profitability in a low-interest-rate, low-growth environment could erode European banks' buffers over time, undermining their ability to support an economic recovery and weakening stability.The report said many European banks are still struggling with high levels of impaired assets and low profitability, due to loan problems left over from the last financial crisis.The report recommended that European regulators and policymakers strengthen insolvency regimes to allow banks to foreclose on legacy nonperforming loans more quickly, while weaker banks need to be consolidated into stronger ones and costs need to be reduced.
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