December 4, 2018 / 11:21 AM / 6 days ago

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

FILE PHOTO: Vice-President of the European Central Bank Luis de Guindos listens during the news conference following the meeting of the Governing Council of the European Central Bank in Riga, Latvia June 14, 2018. REUTERS/Ints Kalnins/File Photo

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 finalising a broad reform of banking rules which includes, among other measures, a temporary favourable 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.

Reporting by Francesco Guarascio; Editing by Alison Williams

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