The ECB plans to tell euro zone banks how to better manage bad loans, banking officials said, in an effort to resolve an issue that is curbing the region's economic recovery.
Bad loans have more than doubled across the euro zone since 2009 and stood at nearly a 1 trillion euros at the end of 2014, the International Monetary Fund said last year. Those loans burden banks and make it harder for them to lend.
The European Central Bank (ECB) has asked a number of banks across the euro zone about their non-performing loans. They were selected to establish a representative sample, not necessarily because they are particularly affected, the sources said.
The request for information is the first step in a process that will see the ECB define best practices on how to deal with bad loans, encompassing banks with different business models in different jurisdictions.
Those guidelines will eventually be used by the ECB's supervisory teams when formulating recommendations for the banks on their watch.
The recommendations might range from hiring more staff to deal with non-performing loans or changing internal practices, to making more provisions, reviewing the value of soured loans or even creating a bad bank.
An ECB spokesman said the request for information was "standard supervisory practice".
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