The ECB is preparing a so-called ‘bad bank’ to mop up an expected wave of toxic debt.
That’s according to Reuters sources.
The move comes as the central bank anticipates hundreds of billions of euros in unpaid loans.
Earlier in June she was clear about the scale of the economic challenge: "The June euro systems staff macro economic projections see growth declining at an unprecedented pace in the second quarter of this year.” The ECB has declined to comment on reports it plans a bad bank.
But economists expect some kind of action.
Around half a trillion euros of debt is expected to go unpaid in the euro zone - and some estimates say that could yet double.
Such a huge pile of bad debt would weigh on already fragile banks, and limit their ability to lend.
That could then worsen an economic slowdown.
Any euro zone-wide scheme will require the blessing of Germany though.
It has long opposed sharing responsibility for other countries’ debts.
But it recently had a change of heart, agreeing to pool EU borrowing for a recovery fund.
💡 newsR Knowledge: Other News Mentions
Andrew Strauss praises Ben Stokes’ 'cricket intelligence' ahead of West Indies Test
Credit: PA - Press Association STUDIO Duration: 01:46Published
Global stocks and euro gain ahead of U.S. jobs report
Credit: Reuters Studio Duration: 01:35Published
ECB nearly doubles stimulus programme to fight coronavirus economic crisis
Credit: Euronews English Duration: 01:39Published
ECB gives euro zone fresh shot of stimulus
Credit: Reuters Studio Duration: 01:47Published
EU briefed by India, China on border clashesThe European Union has been briefed by both New Delhi and Beijing on the recent India-China border clashes, with Brussels welcoming the recent de-escalatory..
Serbia set to join US on EU's travel ban list, say sources in Brussels
Credit: Euronews English Duration: 01:50Published
EU leaders meet ahead of crunch summit to paper over the cracks of COVID recovery plan
Credit: euronews (in English) Duration: 01:30Published
Stocks rebound after previous tumble
Credit: Reuters Studio Duration: 00:54Published
Global economy shows hesitant signs of recovery
Credit: Reuters Studio Duration: 01:37Published
Tennis tournament will be first sports event in Germany to allow fans
Credit: Reuters - Sports Duration: 05:34Published
Amazon Sales Predicted To Rise
Credit: Wochit News Duration: 00:34Published
Dieselgate: ECJ ruling 'makes it easier' to get compensation for Volkswagen emissions scandal
Credit: euronews (in English) Duration: 01:45Published
EU recovery package in spotlight as Angela Merkel addresses European Parliament
Credit: euronews (in English) Duration: 01:33Published
You Might Like
Related news from verified sources
Tweets about this
Related videos from verified sources