February 7, 2018 / 9:54 AM / a year ago

ECB's "good supervision" forcing banks to reduce bad loans: Nouy

FRANKFURT, Feb 7 (Reuters) - The European Central Bank’s “good supervision” is leading banks to reduce the amount of bad loans faster than originally planned, the ECB’s chief supervisor Daniele Nouy said on Wednesday.

Banks, particularly in Italy, have been complaining that the ECB is putting pressure on them to sell non-performing loans (NPLs), even if that results in a loss for the firm.

“Indeed a number of banks are changing their policy using good times to do what they can do (to reduce NPLs), more than they planned in the beginning,” Nouy told a press conference. “This is what in my view good supervision is about.”

Her deputy Sabine Lautenschlaeger stressed selling the unpaid loans was not the only was to achieve that and a good and efficient “work-out” process inside the bank was essential. (Reporting By Francesco Canepa; Editing by Balazs Koranyi)

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