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Euro zone banks must quickly provision for newly soured loans: ECB

Outbreak of the coronavirus disease (COVID-19) near Frankfurt
Outbreak of the coronavirus disease (COVID-19) near Frankfurt

FRANKFURT (Reuters) - Euro zone banks must not delay setting aside provisions for loans souring amid the coronavirus crisis so they can free their balance sheets and support the eventual economic recovery, European Central Bank supervisor Andrea Enria said on Thursday.

"The sooner non-performing loans (NPLs) are identified and provisioned for, the faster and smoother the NPL resolution and disposal process will be, averting damaging hangover effects down the road," Enria told an online conference.

"Postponing the adjustments won’t help banks to re-establish themselves as attractive investment opportunities," Enria added.

(Reporting by Balazs Koranyi)