U.S. parties buy bad loans Europe at dump prices

More and more American parties are buying up bad loans from European banks. These loans can be taken over at dumping prices, as European banks need to clean up their balance sheets to meet higher international capital requirements.

This situation feels a bit harsh for parties. A few years ago, it was the American banks that resold packaged mortgage loans to European banks at full price. By packaging and repackaging these loans, the risks were no longer transparent. The consequence of this is the credit crisis, from which many banks have not yet recovered.

However, the Spanish and Irish banks in particular are forced to divest themselves of these loss-making loans. The financial daily reports that Spanish banks alone will have to sell around 10 to 15 billion euros in loans over the next 12 months.

KPMG expects debt trading to reach a new high in 2014 and 2015, according to the financial daily. This is caused by the fact that the southern European banks then have to repay the cheap loans from the ECB. In addition, the new capital requirements are getting closer.

Source: fd.nl