The European Central Bank (ECB) is reportedly pushing for a ‘bad bank’ to mop up remaining non-performing loans (NPLs) dating from the 2007–2009 global financial crisis amid concerns about a second wave of NPLs sweeping through the eurozone.
The central bank’s concerns have been accentuated by renewed population shutdowns across Europe in response to the rapid pick-up in Covid-19 infections. In addition, there is evidence from an ECB third-quarter lending survey that eurozone banks are reducing credit to the economy and becoming more cautious.