Distressed-Debt Investors Turn to Italian Banks' Bad Loans

Private equity firms look to buy shaky loans on the cheap

Investors who buy troubled loans are flocking to Italy as banks begin disposing of the nation’s record stockpile of dicey debt. An unprecedented €166 billion ($224 billion) of nonperforming loans are on bank balance sheets, according to the latest data from the Italian Banking Association, up from €42 billion in 2008.

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