Visco Says Italian Bad Loans No Systemic Risk as Amount Overdone
- Net NPLs of banks at risk are worth 15 billion euros
- Bank of Italy governor confident market solution can be found
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Italy isn’t on the verge of triggering a systemic banking crisis as the amount of troubled loans is much smaller than commonly believed, Bank of Italy Governor Ignazio Visco said in an interview.
Banks at risk of facing a capital shortfall, needing a restructuring or a reduction in non-performing loans have net NPLs of 15 billion euros ($16.5 billion), the equivalent of 1 percent of gross domestic product, Visco told Bloomberg in Chengdu, China, after a meeting of G-20 finance chiefs. The loans “are evaluated as if they could be taken care of over time without problems,” but even if they had to be dealt with immediately and written off by half, that would “hardly” trigger contagion for the rest of the world, he said.