Central clearing house to help banks offload NPLs
BRUSSELS (Reuters) – The creation of a central clearing house may help Europe’s banks reduce the trillions of euros of bad loans on their books by increasing transparency, a senior European Commission official said yesterday. Eight years since the collapse of Lehman Brothers triggered a global banking meltdown, Europe’s banks are estimated to have about 3 trillion euros in nonperforming loans (NPLs), crimping their ability to lend and scaring off investors. The figures are worrying, Gert-Jan Koopman, deputy director-general for state aid at the European Commission, told a conference. “We have 10 member-states, in which the NPL ratio is still above 10 percent according to our estimates. More than 40 percent of NPLs is concentrated in five member-states alone, Cyprus, Greece, Slovenia, Portugal and Italy. Italy alone holds 25 percent of all NPLs in the European banking system,” he said.