October 13, 2017 / 6:20 PM / 8 months ago

ECB defends proposal to tackle soured bank loans

(Reuters) - European Central Bank supervisory chief Daniele Nouy defended on Friday a proposal to tackle soured bank debt, arguing that it is both necessary and within the bank’s its mandate.

FILE PHOTO: European Union flags flutter outside the headquarters of the European Central Bank (ECB) in Frankfurt, Germany, April 21, 2016. REUTERS/Ralph Orlowski/File Photo GLOBAL BUSINESS WEEK AHEAD SEARCH GLOBAL BUSINESS 9 OCT FOR ALL IMAGES - RC19389BB510

“The draft Addendum does not establish additional obligations on banks and therefore does not go beyond the existing regulatory framework,” Nouy said in a letter to Antonio Tajani, the president of the European Parliament.

“The draft Addendum falls within the supervisory mandate and powers of the ECB,” Nouy told Tajani after he criticised the proposal.

“In fact, it is an obligation of the ECB, in line with its supervisory mandate, to address this key vulnerability in the European banking system.”

Reporting by Balazs Koranyi Editing by Jeremy Gaunt

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