ECB's Enria backs network of bad banks to mop up bad loans

FILE PHOTO: Chairperson of European Banking Authority (EBA) Andrea Enria attends a debate with the European Parliament's Economic and Monetary Affairs Committee in Brussels, Belgium September 26, 2016. REUTERS/Yves Herman

FRANKFURT (Reuters) - European Union countries could create a network of national bad banks to mop up an expected wave of unpaid loans as a result of the coronavirus pandemic, the European Central Bank’s chief supervisor Andrea Enria said on Tuesday.

“A European initiative, for instance connecting in a network national AMCs (asset-management companies), via common funding mechanisms and harmonised pricing, could be a useful tool for addressing the expected rise in NPLs (non-performing loans) and ensuring a level playing field within the banking union,” Andrea Enria told the European Parliament,

Reporting By Francesco Canepa; Editing by Jon Boyle