EU banks eye bad loan relief from state guarantees

ECB move should prevent rickety loans counting as NPLs

Eurozone public guarantees and payment stays in excess of €1 trillion ($1 trillion) could be used by the region’s banks to claim relief from non-performing loan (NPL) rules.

On March 20, the European Central Bank said it could give lenders a break on debtors deemed “unlikely to pay” if their obligations are covered by government guarantees issued by European Union member states. Usually, an asset classified as “unlikely to pay” becomes a non-performing loan (NPL) and subject to heightened loss

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