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ECB Issues Bad-Loan Warning

ECB Issues  Bad-Loan WarningECB Issues  Bad-Loan Warning

European Central Bank executive board member Benoit Coeure late Friday gave the Greek government and the country’s banks a clear warning on nonperforming loans but suggested that the International Monetary Fund will not succeed in its demand for local lenders to undergo asset quality reviews, or AQRs, ekathimerini.com reported. Coeure argued there are problems in the handling of bad loans and asked for all tools to be utilized. He made particular reference to the need for the rapid processing of online property auctions, avoiding any further delays and the broad use of the extrajudicial debt settlement mechanism. He went on to respond to the IMF demand that banks undergo new AQRs, saying there is no need for an emergency review. Coeure added that the planning of European authorities provides for stress tests across Europe, which will also examine the peculiarities of Greek banks in depth, both regarding the high level of NPLs and the assessment of collateral and liquidity conditions.

 

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