Bad loans 'a challenge' for Italy banks

(ANSA) - Milan, November 24 - Bad loans are still a serious challenge facing Italian banks and all potential instruments to tackle the problem need to be considered, including the creation of a "bad bank" structure, said Danièle Nouy, president of the supervisory council at the European Central Bank.
    Nouy said the problem of non-performing loans was down to a series of factors including general economic conditions and failings in debt recovery systems.
    When discussing the possibility of creating a bad bank, a vehicle that could isolate bad assets, Nouy said "we need to use all possible instruments and I hope that this structure can go ahead".
    She also said Italian banks needed to reassess their business model to address weak profitability.