ECB’s De Guindos warns of risks of EU planned bad loan reform

BRUSSELS (Reuters) – The vice president of the European Central Bank, Luis De Guindos, warned on Tuesday of the risks of incompatibility with global standards of a planned reform of European Union banking rules that would facilitate the massive sale of bad loans.

EU finance ministers are close to finalizing a broad reform of banking rules which includes, among other measures, a temporary favorable capital treatment for banks that carry out large sales of their bad loans.

De Guindos said the overall reform was a positive step but raised doubts about the proposed measure on bad loan sales which “could not be compatible with Basel standards”, he said referring to the Basel Committee, a global banking standard-setting body.

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