ECB talks to Italy on buying bundles of bad loans

The ECB is in talks with the Italian government about buying bundles of bad loans as part of its asset-purchase programme and accepting them as collateral from banks in return for cash, the Italian treasury said.

This would be a big boost to a new Italian scheme that helps banks offload some of their €200bn of soured credit and would free up resources for new loans.

Here, Fitch Ratings said last week that it was not a given that it would automatically upgrade Bank of Ireland and AIB, because Irish lenders still carry a “backlog” of €30bn in impaired loans on their books.