MILAN, Oct 9 (Reuters) - The European Central Bank is still concerned with the stock of non-performing loans clogging up bank balance sheets, ECB Executive Board member Yves Mersch said on Monday.
The ECB last week issued new proposals that will force euro zone banks from next year to set aside more cash to cover newly classified bad loans and may also present additional measures to tackle the sector’s huge stock of bad debt.
Italy - whose banks hold nearly 30 percent of the euro zone’s 915 billion euros of bad loans - has reacted angrily to the new measures, asking the ECB to soften them following a public consultation that will be held until Dec. 8.
“Since we have found already a solution for NPLs going forward we are still concerned we have to deal with the existing stock,” Mersch told a conference in Milan when asked about Italy’s concerns over the new proposals.
“If we have rules in Europe, we cannot always put forward cultural exceptions, especially if these cultural exceptions are ... home-made,” he said.
He added that in order to speed up the European banking union “you need to bring your own house in order in every country.”
Reporting by Valentina Za, writing by Silvia Aloisi