Italy’s Bad Loan Rules to Create Uncertainty, Fitch Says

An Italian government proposal allowing struggling borrowers to repay soured debt for a fraction of the value will give rise to “significant” uncertainty in the country’s market for bad loans, according to analysts at Fitch Ratings.

Prime Minister Giorgia Meloni’s ruling coalition is finalizing a framework that would let individuals and small corporate borrowers buy back debts that soured between 2015 and 2021 from the investors that bought them from domestic banks, Bloomberg News reported last month.

Source: Bloomberg