The European Central Bank’s (ECB) latest push
to rid the eurozone of its persistent bad loan problem has seen
it put forward additional proposed rules that would force banks
to set aside more cash to cover the value of the non-performing
loan (NPLs) on their books.
The ECB’s proposal is part of a planned
consultation taking place between October and December on
'quantitative supervisory expectations for minimum levels of
prudential provisions for new NPLs’. It aims to
incentivise banks to address their bad loans once and for all,
notably by forcing them to post collateral against the value of
loans once these become non-performing.
Speaking at the Single Resolution Board’s
annual conference on September 29 in Brussels, Danièle
Nouy, chair of the ECB’s Single Supervisory
Mechanism’s (SSM) supervisory board, said that the
EU needed to see significant progress in addressing
"That’s one of...