Euro zone banks may get reprieve until 2021 from ECB bad debt rules
According to the guidelines, banks will have two years to fully provision for soured non-secured debt, while in the case of secured loans the deadline will be seven years. The new guidelines were intended to take effect on Jan. 1 but the bank pushed back its deadline to revise the proposal after fierce criticism, particularly from Italy, whose banks have accumulated more bad debt that most in Europe.
Bankers and European parliamentarians, particularly from Italy, fear that forcing banks to set aside more money against their bad loans will strangle lending in economies. Image source: Reuters