August 9, 2018 / 8:59 AM / a year ago

German watchdog Bafin sets up new unit for ailing banks

FILE PHOTO: The logo of Germany's Federal Financial Supervisory Authority BaFin (Bundesanstalt fuer Finanzdienstleistungsaufsicht) is pictured outside the former finance ministry building in Bonn, Germany, Germany, April 5, 2016. REUTERS/Wolfgang Rattay

BERLIN (Reuters) - German financial watchdog Bafin is setting up a new unit to supervise ailing banks if the financial sector runs into trouble, executive director Raimund Roeseler told a German magazine.

Bafin sees a conceivable scenario in which more banks could face difficulties due to a weakening economy that results in more defaults on loans and rising interest rates, Roeseler told business weekly WirtschaftsWoche in an interview published on Thursday.

The new unit “shall ensure that affected banks take effective countermeasures and take even unpopular measures,” Roeseler said.

Reporting by Tassilo Hummel, editing by David Evans

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