On 28 January 2019, the European Systemic Risk Board (ESRB) published a report on macro-prudential approaches to non-performing loans (NPLs). The report focuses on the role that macro-prudential policy can play in preventing system-wide increases in NPLs and/or in strengthening banks’ resilience to such increases. Among other things the report identifies business cycle and asset price shocks as two of the main drivers of system-wide increases in NPLs. A downturn of the business cycle and/or negative asset price shocks, particularly in sectors to which the banking sector is significantly exposed (residential real estate and commercial real estate) may trigger a system-wide increase in NPLs. In some cases such increases may also be associated with instances of significant resource reallocation within the economy.