November 20, 2017 / 1:00 PM / a year ago

Soured euro zone bank loans an urgent issue - ECB's Jazbec

Bostjan Jazbec, Slovenia's central bank governor, speaks during an interview in Ljubljana December 13, 2013. REUTERS/Srdjan Zivulovic/File photo

VIENNA (Reuters) - Soured loans sitting on the books of euro zone banks are holding back growth and creating a systemic risk, so a resolution is urgent, European Central Bank Governing Council member Bostjan Jazbec told a conference in Vienna on Monday.

“I think that there is an urgent need to clean up the banking system of all the NPLs (non-performing loans) that are still in the system,” Jazbec said.

The ECB has recently come under fire for a proposal to sharply increase risk provisions on new non-performing loans, with banks on the bloc’s periphery claiming that the new rules would hold back lending and ultimately growth.

Reporting by Balazs Koranyi and Francois Murphy; editing by Francois Murphy

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