BUSINESS

Regling: Creation of EU bad bank would be ‘valuable’ move

TAGS: Euro, EU, Banking

Setting up a European bad bank to absorb the mountain of bad loans saddling lenders in several eurozone countries would be a “valuable” move to improve the bloc’s financial stability, the head of eurozone bailout fund, the European Stability Mechanism (ESM), said on Monday.

A plan to establish an “asset management company” that would facilitate trading the more than 1 trillion euros’ worth of bad loans in European Union lenders’ balance sheets was presented by the European Banking Authority.

Klaus Regling welcomed the EBA’s proposals and called for some sort of public support to the EU-wide bad bank.

Italy, Greece, Cyprus, Portugal and Slovenia are among the EU states with the highest level of bad loans in their banking systems, EBA figures show.

[Reuters]

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