©Reuters. Panoramic view of Fondamenta dei Vetrai, one of the main streets of Murano Island, Venice, Italy, on November 12, 2021. Photographed on November 12, 2021.Reuters/Manuel Silvestri/File photo
ROME (Reuters) – Italy’s Industry Minister Adolfo Urso told Reuters he has no plans to push ahead with a bailout for delinquent debts and would rather focus on the issue after a proposed reform to bad debt laws alarmed investors. He said he would like to leave it to Congress.
Mr. Erso has long advocated for measures that would allow delinquent borrowers to repay their debts in some way and avoid foreclosure.
In recent months, a growing number of MPs from both the ruling and opposition parties have backed a proposed reform to bad loan rules aimed at supporting individual and small business borrowers, which has heightened uncertainty in the bad debt buying sector. , already facing a lack of activity.
“We are in discussions with stakeholders in the bad debt industry, but we will leave this matter to parliament. If by any chance there is agreement at parliamentary level on how to proceed, the government should listen to it.” he said. he told Reuters on Wednesday.
The disposal of more than 300 billion euros ($325 billion) of bad bank loans in recent years has made Italy the biggest market for such loans in Europe.
Officials told Reuters last month that the industry ministry was working on its own package of measures focused on supporting small and medium-sized businesses struggling to repay their debts.
However, Urso said the ministry does not intend to announce any formal initiatives at this stage.
“There are some proposals in Congress regarding the problem of bad loans, and we have to wait for the results. Then we will know,” he said.
Both Italy’s central bank and the economy ministry are working behind the scenes to defuse the threat of legal changes that would negatively impact the bad debt market, people familiar with the matter said.
Fabio Panetta, the newly appointed head of the Bank of Italy, said this month that it was important to develop an effective secondary market for bad bank loans and that he was disappointed with progress to date.
Global risk watchdog the Financial Stability Board last week urged Italy not to introduce measures that would undermine the country’s bad bank lending market.
(1 dollar = 0.9229 euro)