FRANKFURT The European Central Bank is planning to give euro zone banks non-binding guidance by the end of 2016 or early 2017 to cut their bad debt pile, raising the heat on lenders but not forcing their hand, sources said.
The ECB, which supervises 129 of the biggest banks in the euro zone, will eventually set confidential quantitative and qualitative targets but not all will necessarily come in writing, the sources told Reuters.
This would give banks some flexibility and suggests that the ECB will at least initially rely heavily on persuasion.
Weighed down by around 900 billion euros ($1 trillion) of bad debt, banks have delayed fixing this legacy of Europe’s debt crisis, worried that write-offs would lead to losses, limiting divid…
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