EU Tightens Capital Rules For Banks With 'Bad' Loans

Law360, London (April 9, 2019, 6:38 PM BST) -- The European Council said Tuesday that it has adopted new rules that will force banks with a share in the bloc’s near-$1 trillion stock of “bad” debt to set aside more funds to prevent further loans from going sour.

The new rules set capital requirements for EU banks with nonperforming loans on their balance sheet. This extra money, which will be held on the assumption that a customer will not be able to afford to pay back their loan, will increase the bank’s resilience and prevent a bailout by the public, the council said.

EU lawmakers hope the capital requirements will...

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