Tougher EU Rules Are Pushing Some Supply-Chain Debt Into Default
Shipping containers sit among gantry cranes in the Busan Port Terminal in South Korea.
Photographer: SeongJoon Cho/BloombergThe banks that grease Europe’s supply chains face a spike in bad loans as the region’s top regulator introduces tougher standards.
The rules could classify 15% to 20% of receivables for which factoring firms bear the risk as defaulted, said Diego Tavecchia, an official at the EU Federation for the Factoring and Commercial Finance Industry. That equates to as much as 25.5 billion euros ($31.3 billion) in bad loans, he said.