Rinaldi: let’s not suffocate the economy with a credit crunch. Enria: but we have to cancel bad loans.

24 March 20214 years babelfish

Speech by Antonio Maria Rinaldi in Econ with the head of the European Banking Agency Enria. In recent days, a series of statements have made noise in which the banking authorities were starting to get their hands on, making it clear that it was time for a squeeze on NPLs, selecting companies and starting the procedures for those that, they say, on the basis of the usual summary indices, can not pay. Basically a big credit crunch that would make the crisis even more painful.

In this context comes the intervention whose text is the following

Thank you President Tinagli,

Thanks Doctor Enria.

The monetary policy of the Union together with the fiscal policy responded promptly in support of the serious economic crisis generated by the COVID-19 pandemic.

The same cannot be said for the rules on the definition of the Past Due which identify expired or overdue credits for more than 90/180 days that fall within the category of positions in default and NPLs.

Unfortunately, the granted moratoriums will soon end, and businesses and families will be treated as if we were in a normal state.

The first signs of greater attention to credit by banks are already emerging and this could give rise to many bankruptcies and “undue” bankruptcies in the eurozone, as stated by the World Bank itself in a 2020 report.

My party, the Lega, believes that it is necessary to continue supporting families and businesses until the real end of the pandemic, that is, until the vaccination campaign is over and until normality is regained and that the way forward is not and more that of the moratoriums but rather that of the revision of the rules.

For example, legislation that allows individual pre-emption on the block sale of NPLs by old debtors.

Last week, in an exchange with President Lagarde, it emerged that you recently sent a letter to the banks asking them to carefully analyze case by case.

I highly respect your work dr. Enria and I know very well that she is not the one who writes the rules, but the one who applies them and for this reason, I would like your authoritative reflection on the matter.

Thank you

Enria confirmed that, although there is still a serious economic crisis, it is still necessary to avoid that NPLs remain in the balance sheets of banks, confirming, even if alleviated, the doubts that more or less everyone has on the matter.

Here is a complete video of the intervention.

WhatsApp Video 2021-03-23 at 3.32.26 PM

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The Rinaldi article : let's not suffocate the economy with a credit crunch. Enria: but we have to cancel bad loans. comes from ScenariEconomici.it .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/rinaldi-non-soffochiamo-leconomia-con-una-stretta-creditizia-enria-ma-dobbiamo-cancellare-i-crediti-in-sofferenza/ on Tue, 23 Mar 2021 16:16:42 +0000.