Italy rejects a plan to funnel non-performing loans into a “bad bank”
Bloomberg reports that Italian Treasury officials rejected proposals to funnel banks’ non-performing loans into a so-called “bad bank,” fearing that such a plan would deepen the link between the Italian sovereign government and the country’s troubled banks. Spain is currently attempting to use this plan to separate its banks and their bad loans from the country’s sovereign debt—though the plan’s success is not yet clear.