Eurogroup President
Jeroen Dijsselbloem said Thursday that the situation for
European banks was not "disastrous" even though they have been
hit hardest by the recent stock market turmoil.
He also said that many banks needed to offload the bad
loans weighing down their balance sheets and that it was
"serious" that some small investors had not been sufficiently
informed about the risks of buying bonds in lenders.
Premier Matteo Renzi's government recently reached an
agreement with the European Commission on a guarantee mechanism
to help Italian lenders offload some of billions of euros of
non-performing loans.
The government has also come over fire over its recent
rescue of four small Italian banks, which left investors with
worthless shares and bonds in the lenders.
Many of the small investors said they were not informed of
the risks by the banks who sold them.
"It's not true that the banks are in a disastrous
situation," Dijsselbloem told the European Parliament.
"They are in a bad situation, although in individual cases
there is still issues of the legacy of the crisis, such as
enormous quantities of deteriorated credits.
"There's no magic wand to make them disappear, but it's
necessary to offload them.
"As for clients who bought retail products subject to the
bail-in (if the bank fails) without being sufficiently well
informed, this is a serious problem".
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