Efforts have accelerated to combat the bad-loan problem afflicting much of southern Europe, the Wall Street Journal reported today. In Italy, where 16 percent of all loans are nonperforming, banks may shed more than €60 billion in bad loans this year, according to PricewaterhouseCoopers LLP, partly as a result of this summer’s €25 billion government bailout of three ailing lenders. Greece has passed new laws aimed at kick-starting a market for bad loans, and banks there have added staff — a fivefold increase to about 10,000 — to chip away at their €110 billion of bad debt. Meanwhile, investors have poured hundreds of millions into new funds to buy up debt representing bundles of loans.
