EU bad bank proposal could boost AIB sale outlook

A proposal under discussion by Klaus Regling and other senior European officials to create a Nama-like ‘bad bank’ to buy out bad loans weighing down Europe’s banks could boost the Government’s hopes of selling shares in AIB this year, according to an Irish expert.

Eugene McErlean said any plan would help banks “from Italy to Ireland” to realise the losses sitting on their balance sheets that are holding back normal lending and reining in EU growth.

A eurozone bad bank would boost banking markets and thus help the prospects for a start to selling down AIB shares, he said.