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Bank
of Italy governor Ignazio Visco said recent changes to speed up
bankruptcy procedures and the recovery of assets backing
defaulted loans, as well as tax measures to allow banks to fully
book credit losses, will over time help lenders cut bad loans --
which currently represent 10 percent of total loans.
"The rise in the value of problematic loans triggered by the
reforms ... may not be enough to give this market an adequate
size," Visco said.
But he also urged a rapid conclusion of talks between Italy and
European Union authorities over the creation of a vehicle to
purchase bad loans from banks, saying it would help restart
credit.
"Prolonged uncertainty over this matter may hold back market
transactions," he said. "Banks must also strive to improve data
on problematic loans ... Insufficient information may discourage
potential buyers," he added.
(Reporting by Valentina Za, editing by Isla Binnie)
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