Ferdinando Giugliano, Columnist

Bad Banks Really Do Hurt Your Economy

New research proves what the ECB has been arguing all along. The skeptics in Southern Europe should listen up.

February 20, 2019 at 5:00 AM UTC

Ferdinando Giugliano is a former Bloomberg Opinion columnist. He was previously a member of the editorial board of the Financial Times.

The ECB in Frankfurt.
Photographer: Alex Kraus/Bloomberg

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Since taking over as the main supervisor of the euro zone’s largest lenders, the European Central Bank has waged a war against sickly lenders.

The regulator has forced banks to be more open about the value of the exposures sitting on their books, and urged them to write down bad loans faster. All this should not only bolster financial stability, it should also help growth: providing less forbearance to “zombie” borrowers ought to free up credit for more promising startups.