This could lead to mergers among EU canada goose outlet
EU warns banks may face Canada Goose Coats On Sale higher bad loan risk when canada goose clearance ECB tightens
BRUSSELS canada goose store (Reuters) European Union banks may face increasing risks Canada Goose Outlet from bad loans totaling 1 trillion euros ($1.1 trillion) when the European Central Bank cuts back its economic stimulus program, internal EU documents seen by Reuters said.
The famous euro sign landmark is pictured outside the former headquarters of the European Central Bank (ECB) in Frankfurt, Germany, buy canada goose jacket cheap July 17, 2015. REUTERS/Kai Pfaffenbach
Banks have been saddled with more so called non performing loans (NPLs) following the 2008 global financial crisis, as companies and households have struggled canada goose clearance sale to pay their debts. This in turn has crimped their ability canada goose coats on sale to make new loans.
While the problem is more acute in countries such as Greece and Italy, which have experienced a prolonged economic crisis, it has European dimension with spill overs possible, Canada Goose Online a report by representatives of EU canada goose countries and regulators said.
And the risks posed by NPLs to the whole EU banking system may increase, monetary conditions become less accommodative, a document accompanying the report said.
The ECB is scheduled to cut the pace of its bond purchases, which it has used to Canada Goose sale try to stimulate economic growth, by a quarter to 60 billion euros a month from April.
Although it will continue them until at least the Canada Goose Jackets end of the year, it is also preparing the ground for a gradual phasing out of its aggressive stimulus measures, sources said.
EU countries with the highest rates of bad https://www.canadagooseparkasoutlet.ca loans Canada Goose Parka have returned to growth since the ECB launched its stimulus program in 2014, but it remains unclear what will happen when this ends.
While banks are likely to benefit from higher interest rates, which improve the margin they make on their loans, this may be offset by the effects of another an economic slowdown.
The report will be discussed at a meeting of EU finance ministers in Malta canada goose coats on April 7 8 buy canada goose jacket on how to tackle the NPL issue and a canada goose store more detailed version is expected in spring.
ITALY BAD LOANS Germany, the EU largest economy, has so far opposed EU funded solutions to the problem, arguing that it is only an issue in some countries and it is up to them to resolve it.
Greek banks are being urged to reduce their high load canada goose outlet store locations of bad loans, a source said on Wednesday.
In Portugal NPLs are almost 20 percent of the total, and in Slovenia and Italy the ratio is above 16 percent, against a slightly declining EU average of 5.4 percent.
To tackle the problem, the EBA proposed in January setting up a publicly funded bad bank that would acquire soured loans at prices higher than the market is canada goose replica now ready to pay.
This canada goose black friday sale could help create a secondary market for the loans, which banks now are reluctant to sell because prices are too low and there are 2018 canada goose outlet too few buyers.
Italian lenders price bad loans at 41 percent of their nominal value on average, but the quality of Canada Goose online the credit varies and few could afford a capital rise on the scale of UniCredit
While Germany did not endorse the EBA plan, the EU documents point at the development of a secondary market for NPLs as a priority.
But this issue remains controversial and is likely to require a compromise at political, rather than technical, level at the Malta meeting, an EU official familiar with the discussions told Reuters.
The documents also suggest a wider of banking sectors as canadian goose jacket states address the NPLs canada goose deals problem. This could lead to mergers among EU canada goose outlet toronto factory banks after they offload their bad loans, a banking industry official said.
limits to conclude insolvency procedures are also suggested as a cheap Canada Goose way of boosting the value of bad loans, as recovering them would become easier and less costly. This proposal would complement European Commission plans to shorten bankruptcy procedures and the recovery of bad loans.