1. Main
  2. Learn
  3. Economy
  4. Finance

'Bad bank' deal could be option for several countries: EU banking resolution chief

©Reuters ©Reuters

A state-backed "bad bank" that would take over non-performing loans from a country's banks, as has been agreed for Italy, could also be an option for other countries, the head of Europe's new banking resolution authority is quoted by AFP as saying on Wednesday.

"Italy has come up with a constrution for a bad bank that uses a market solution without state aid," the head of the Single Resolution Board, Elke Koenig, told the business daily Handelsblatt in an interview.

"But Italy isn't alone with this problem. In other countries, too, a large amount of non-performing loans has also amassed," Koenig said.

The solution reached in Italy "could also be suitable for many other countries," she added, pointing out that "Germany has also had good experience" with such a solution.

Last month, the European Union and Italy reached agreement on creating a guarantee vehicle to help Italian banks sell bad loans.

Rome had spent more than a year thrashing out a solution with Brussels, having to ensure that any deal would not contravene EU rules on state aid.

With its debt-laden economy struggling to recover from a deep recession, Italy was keen to reach a solution to aid a banking system forced to set aside capital to cover bad loan losses, limiting lending to households and firms. 

Italy's banks are saddled with around 200 billion euros of bad loans. 

Nobel prizewinner proposes a new city in KZ
New abnormal snowfalls expected in Kazakhstan
Huge glacier retreat triggered in 1940s
Hyperloop construction begins in Las Vegas
"Moonlight" to top Spirit Awards nominations
Oil prices fall due to investors uncertainty
New dwarf galaxy discovered around Milky Way
Kanat Islam becomes a top ten WBO boxer
World oil prices continue to rise
Kazakhstan expects warming - Kazhydromet
Merkel to seek fourth term as chancellor
Sale of Tintin drawings set to break records
US, EU stocks fall as markets focus on dollar
Pacific leaders urged to defend free trade
EU warns eight nations on budget deficit
Universiade-2017: Athletic Village is ready
Bob Dylan can't make Nobel ceremony
Messi will never leave Barca - club president
Google, Facebook take aim at 'fake' news
Aerosmith announces Europe 'farewell' tour
Putin, Trump to normalise US-Russia ties
At least 10 hurt in southern Turkey blast
6.2 quake hits western Japan
OPEC agrees shock oil output cut
Israeli ex-president and Nobel laureate Peres dies
Germany blocks WhatsApp data transfers to Facebook
32,000 arrested in Turkey coup probe
Youth to the fore as Milan fashion week opens
Xenophobia threatening peace in eastern Germany
Four-in-10 Japanese are virgins: poll
Sweden re-militarises Baltic island of Gotland
China to launch second space laboratory: Xinhua
More than a billion stars mapped in Milky Way: ESA
Boxing: Golovkin eyes Saunders after stopping Brook
Kazakhstan shifts PM to security chief
Oil prices gain despite rising OPEC supply forecast
US to give Philippines military planes
Singapore wages war on Zika-bearing mosquitoes
Italy quake death toll nears 250
Viral photos add fuel to French burkini debate
18 dead as Italy struck by powerful quake
Japan's first lady visits Pearl Harbor
Pokemon's a no-go on Bangkok's roads
July was Earth's hottest month in modern times
Pakistan rock climbers scale new heights