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Why a European bad bank may not be the right answer
Types of loans most likely to become distressed due to coronavirus don’t suit EU-wide solution
![Bad bank burden Bad bank burden](/sites/default/files/styles/landscape_750_463/public/2020-07/Bad-bank-burden.jpg.webp?h=82803d34&itok=DKoF9JUz)
In recent weeks, there has been much talk of setting up a European bad bank to manage the growing non-performing loans in the banking sector resulting from the Covid-19 outbreak. Is this idea legally feasible and financially sound?
First, we should note that the eurozone banking union already has the option to set up a multilateral bad bank, meaning that the key decisions are taken by a European supranational authority with the possibility of European funding. This option is contained in the
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