EU Parliament legal service says ECB bad loan plan beyond its competence

BRUSSELS (Reuters) – The legal service of the European Parliament said on Wednesday that the European Central Bank’s plan to force banks to set aside more money for new loans that turn sour goes beyond the bank’s competence, adding new criticism to the battered project.

The document, dated Nov. 8 and seen by Reuters, said the ECB had “no competence” to adopt the plan in its current form, because it imposes “binding rules of general scope applicable to all banks” supervised by the bank.

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