The European Central Bank’s vice president yesterday called for the creation of government-backed bad banks to help soak up some of the eurozone’s €1 trillion pile of unpaid loans stemming from the financial crisis.

“A true European AMC (asset-management company) faces, however, difficulties in the present environment. In more immediate terms, a way forward could be the creation of a European blueprint for AMCs to be used at national level,” Constancio said at an event in Brussels.

“This European blueprint should clarify what is possible within a flexible approach to the existent regulation and encourage countries to adopt all necessary measures in a well-defined time frame.”

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