The European Union Wants to Create a Public Bank for Continent’s Toxic Debt
£910BILLION worth of bad debt could collapse the European Union banking system. The “urgent and actionable” reality in Europe, which has left to increasingly radical parties claiming seats in the continent’s parliaments, has led to regulators on the continent plan for a “bad bank” contingency. Such a “bad bank” would effectively collectivize among the taxpayers the bad bets made by banks on the continent.
According to Andrea Enria, chairman of the European Banking Authority, EU’s banking problems have become “urgent and actionable.” Mr Enria recommended an EU “bad bank” be created in order to buy up toxic loans and fix the forlorn economy. The bad bank would use taxpayer funds to buy bad loans from struggling lenders.
The EU is reportedly researching the ways in which regulators can reduce failing bank loans. A report, co-written by national finance ministries, is due in March, Express UK reports.
EU banking system is burdened by €1.06trillion in toxic debt. That’s 5.4 percent of the entire EU’s total loans. Approximately 10 EU states have an average bad loan ratio of 10 percent.