$1 trillion bad loan mountain casts shadow over Europe

Reuters  |  FRANKFURT 

By John O'Donnell

FRANKFURT (Reuters) - German and French banks have together amassed almost 230 billion euros ($272 billion) of loans, according to regulators' data, underscoring the scale of a problem often linked solely to that is now causing worry across the region.

The tally puts the combined total of problem in the euro zone's largest economies, France and Germany, close to that of Italy's 260 billion euro debt pile.

It lays bare the extent of the pan-European problem although it is far easier for banks in France and Germany to cope with because debts there account for a smaller proportion of overall credit.

After Italy, which had of 262 billion euros at the end of March, the biggest pockets of debt not repaid over roughly three months are found consecutively in France, Spain, Greece, Germany and the Netherlands.

France has 160 billion euros, while Spain has 139 billion euros and Germany 69 billion euros.

The picture alters when measuring the proportion of that are Greece is worst, where almost one in two have not been serviced in three months, according to the European Banking Authority.

In and Ireland, roughly one eighth of are soured, compared with less than 4 percent in France.

The European Central Bank has encountered stiff resistance in the European Parliament not only from Italian but also German lawmakers to its attempts to clean up Europe's $1 trillion mountain.

It is emerging as the biggest challenge yet to the ECB as banks supervisor.

($1 = 0.8452 euros)

(Reporting by John O'Donnell; Editing by Mark Potter)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, October 13 2017. 16:48 IST