Italian finance minister eyes ‘bad bank’ to clean up risky loans

The Italian finance minister Pier Carlo Padoan said in an interview on 25 January 2015 that the government was considering the option of setting up a 'bad bank' to help clean up Italy's banking sector.

Mr Padoan did not give further details but said whatever solution was adopted would have to take account of European Union rules limiting state aid to business. Bad banks generally take over risky assets from troubled financial institutions, isolating them from that risk.

ESO: Background information: EBA publishes 2014 EU-wide stress test results http://www.europeansources.info/record/eba-publishes-2014-eu-wide-stress-test-results/

EurActiv, 22.01.16: Renzi clash with Juncker and Merkel escalates http://www.euractiv.com/sections/global-europe/renzi-clash-juncker-and-merkel-escalates-321243

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