ROME: Bad loans stood at 184 billion euros ($210 billion) in December, according to Bank of Italy data. Italy is working on several options to tackle the problem, including setting up a bad bank, Economy Minister Pier Carlo Padoan said announced this earlier this year.
Italy’s intention to set up a “bad bank” to mop up problematic debts and revive lending to the economy is a “very good idea”, Ignazio Angeloni, a supervisory committee member of the European Central Bank, was quoted saying by Italian daily la Repubblica on Wednesday.
The role of the state is fairly crucial as these type of measures have a public goal,” Angeloni told the paper, adding it was not the ECB which suggested the idea to the Italian government.
Angeloni also said government bonds should not be considered risk-free, adding that capital rules should take this into account.