Yesterday European Central Bank President Mario Draghi said Euro zone banks need to cut their stock of soured debt further to boost lending and improve profitability to make themselves more attractive to suitors. Draghi urged eurozone governments on Tuesday to take further action to shore up the region's banking sector, including creating a common insurance plan for bank deposits.
Banks with high levels of legacy assets havekept their lending low as their ability to build up capital is limited, Draghi told a conference in Paris. Reducing the stock of non-performing loans has been one of the top priorities of the ECB and soured loans are down by about a third from their peak at around 1 trillion euros.
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