BRUSSELS (Reuters) - New proposals by the European Central Bank (ECB) for resolving hundreds of billions of euros of bad loans go beyond the bloc’s supervisory mandate, Italy’s Economy Minister said on Tuesday.
The ECB has come under fire for proposing blanket provisioning rules on new bad loans and Italy has been one of the most vocal in warning against the setting of similar rules for soured debt already on the books.
At a televised news conference after a meeting of euro zone finance ministers in Brussels, Economy Minister Pier Carlo Padoan said the plan “goes beyond the supervisory limits” of the bloc’s SSM mechanism.
“We are absolutely in favor of tackling this problem, which stops banks lending, but using a reasonable method and timeframe that avoid creating any new fragility,” Padoan said.
Reporting by Isla Binnie and Francesca Piscioneri