European Central Bank (ECB) officials are working on a plan to sell hundreds of billions of euros of bank loans in an Amazon-like website, according to a press release. The ECB officials aim to steer the economy and counter dominance by Wall Street debt investors by the debt swoop. The plan is part of ECB efforts to tackle the growing challenge of unpaid loans and distressed debt.
- The sale will open up a market for buyers of smaller portfolios and get the market moving-Edward O’Brien-Senior ECB.
- A few large buyers have controlled the bad loans market; some firms purchase the portfolios at steep discounts.
- Banks sell bad debts at below their face value to free up balance sheets.
- The ECB plan will be discussed with the union officials before being signed off.
- Passed, the new marketplace will be under a Single Resolution Board (SRB), an EU agency that winds up struggling banks in Brussels.
Bad loans in the eurozone are estimated to be half a trillion euros, and have broader impacts on the economy. EURUSD is down 0.24%
