Spain 
Italy 
Greece 
ECB Pressures Novo Banco to Further Reduce its Bad Debts
8 March 2019
The European Central Bank (ECB) has stated that it wants Novo Banco to reduce its non-performing loan exposure (NPE) to 10% this year in order to lower its holdings of bad debts to conform to guidelines set by the European Banking Authority.
Novo Banco had already submitted a plan for reducing its exposure to 12-13% from its current level of 22.4%, above the level desired by the banking authorities as they tighten the requirements for exposure to non-performing loans.
The ECB’s desire to see a more rapid reduction in Novo Banco’s NPE partially explains the speed of the bank’s portfolio sales. Most of the bank’s bad debts came from BES, and the bank is largely protected from losses on the assets by the Resolution Fund (CCA – Contingent Capital Agreement).
Original Story: Expresso
Summary / Translation: Richard Turner