Euro zone bank not watching souring credit well enough: ECB

FILE PHOTO: Specialists work on a crane in front of the European Central Bank (ECB) in Frankfurt
FILE PHOTO: The European Central Bank (ECB) logo in Frankfurt, Germany, January 23, 2020. REUTERS/Ralph Orlowski

March 16, 2021

FRANKFURT (Reuters) – Euro zone banks need to do a better job in recognizing soured loans as their current ways of identifying troubled credit may be ineffective, European Central Bank supervisory chief Andrea Enria said on Tuesday.

“Particularly worrisome is the large share of exposures that have been directly transferred from stage one — performing — to stage three — non-performing — without passing through stage two — underperforming,” Enria said. “This could suggest that early-warning systems are ineffective.”

(Reporting by Balazs Koranyi; Editing by Francesco Canepa)