Italy: ‘Bad bank’ is on the cards

ITALY is considering setting up a state-backed “bad bank” to help clean up its banking sector, Economy Minister Pier Carlo Padoan said yesterday. Bad loans force lenders to set aside money to cover expected losses. They have become the main problem for Italian banks, which fared the worst in a Europe-wide health check of the sector last year. Italian banks’ gross “sofferenze” – or loans least likely ever to be repaid – rose to e181 billion (R2.4 trillion) in November, more than double their level in 2010. – Reuters