European Banks Brace for Review of Risky Loan Disclosure
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A dark corner of European finance is about to be illuminated by European Central Bank inspectors who are sifting through loans that banks restructure for clients and don’t fully disclose.
“What’s scaring investors is the question of whether banks are giving money to companies that deserve to go bankrupt and keeping them alive to avoid recording losses,” Mascia Bedendo, an assistant professor of finance at Bocconi University in Milan, said in a phone interview. “The amount of forborne and nonperforming loans is still very obscure.”