A draft proposal by the European Commission to tackle the bloc's stock of bad bank loans gives lenders eight years to write down impaired debts backed by collateral, a source familiar with the matter said on Friday.

Confirming a press report in Italian daily Il Messaggero, the source said the percentage of writedowns required every year once a loan is classed as non-performing would rise gradually over time.

The source added the draft envisaged gradual writedowns over two years for unsecured loans, of which 35 per cent in the first year.

The EU Commission was not immediately available for a comment.

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