Central bank data issued last week showed bad loans reached a high of 197 billion euros ($223 billion) in July. The rising stockpile is hindering banks’ ability to expand lending and holding back the country’s recovery from a record-long recession.
U.S. investors have shown “an especially keen interest” in buying non-performing loans once Italy sets up a bad bank, Filippo Taddei an economic adviser for Prime Minister Matteo Renzi said in an interview. “Interested parties range from hedge funds to institutional investors, both Italian and foreign.”
Italy is seeking to speed up banks’ disposals of bad loans to free up resources for lending by setting up a so-called bad bank. The government is in talks with the European Commission to find a solution that complies with state-aid rules, because the vehicle that will buy problematic loans from lenders might be financed by government-backed bonds and by public money. Some investors would prefer that state-guaranteed bonds be eligible as collateral at the European Central Bank for credit operations. Bad loans purchased by a bad-bank vehicle may be sold or managed for recovery. “At the end of the day, you want the people that hold the asset and place the asset on the market to posses the tools to increase their value.“ Taddei said.
“The creation of a bad bank would free-up resources and capital, so this is a positive news for markets,” said Francesco Confuorti, chief investment officer at Advantage Financial SA, a Milan-based investment firm. Renzi’s government has also sped up the time it takes creditors to seize assets to recover money lent to clients, a move that should also boost NPL disposals. “We are very open to foreign participation. We are already seeing foreign money going into financial markets.”said earlier on the occasion of "Bad Bank Plan" Italian Finance Minister Pier Carlo Padoan.
Jr.Trader G.Hristov
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.