February 7, 2014 / 4:57 PM / in 4 years

EBA head says banks reclassifying bad loans ahead of asset review

ROME, Feb 7 (Reuters) - Bad loans are on the rise because of the weak economy but also because banks are redefining some loans for the asset quality review being undertaken ahead of banking union, the head of the European Banking Authority Andrea Enria said on Friday.

“Non-performing loans are rising because the economic situation is not positive, but also because banks are re-classifying their loans for the asset quality review,” based on EBA rules, Enria told reporters on the margins of a conference in Rome.

He added that this was less the case for Italy, which already had a stricter definition of non-performing loans. (Reporting by Gavin Jones, editing by Naomi O‘Leary)

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