ECB plans on setting up a “bad bank”

Geography: Europe
Sector: Banking & Finance

Read More: ECB's "bad bank"

Reuters reports on 10 June 2020 that the European Central Bank is looking into setting up a “bad bank” for the billions of unpaid loans caused by the COVID-19 pandemic. One structure under consideration would involve the European Stability Mechanism providing guarantees to the bad bank, which would issue bonds to commercial banks in exchange of unpaid loans.