BRUSSELS, Nov 10 (Reuters) - The European Commission said the European Central Bank can impose capital requirements on banks to provide for bad loans only on a case-by-case basis, a document published on Friday said, in a boost for the European Parliament in a dispute over the ECB’s bad loan guidelines for the sector.
The Commission’s position is at odds with ECB’s plans to require all banks to set aside more funds from January against credit that turns sour. The ECB plans sparked sharp criticism in Italy, and in the European Parliament which said EU legislators should be involved in such sector wide guidelines.
The Commission also said that new ECB rules to avoid the build-up of bad loans should be applied only to new loans granted after a cut-off date that needs to be decided. (Reporting by Francesco Guarascio)