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ECB Defends Tough Tack on Leveraged Loans as Banks Cite Fallout

Elizabeth McCaul 

Elizabeth McCaul 

Photographer: DANIEL ACKER

The European Central Bank defended efforts to rein in the risk that lenders are taking in leveraged finance after the financial services industry said that the tough tack is harming banks and borrowers. 

Lending to those that are ultimately unable to pay “is something that is only going to hurt the real economy,” Elizabeth McCaul, a member of the ECB’s supervisory board, said at a conference on Friday.