FRANKFURT AM MAIN / NEW YORK (Reuters) – The European Central Bank is working to create an Amazon-style website (NASDAQ: AMZN) that will sell hundreds of billions of euros of overdue bank loans accumulated during the pandemic in an effort to bolster the economy and quit. a challenge to the dominance of Wall Street's big debt investors.
The plan, developed by senior ECB officials, is part of the eurozone’s measures to tackle the growing mountain of unpaid loans and aims to prevent bad debt funds from buying them at knockdown prices.
“The idea is to open up the market for buyers of small portfolios with an Amazon or eBay-style marketplace where you can browse the item … That could get the market off the ground,” said Edward O'Brien, an adviser to the ECB at interview with Reuters.
The big foundations have bought up many billions of euros in loans since the last financial crisis, acquiring huge amounts of property, some of which have since risen in value.
“The bad loans market was dominated by a few very large buyers. In a typical scenario, one of these firms could buy a very large portfolio at significant discounts,” says O'Brien.
A Deloitte study found that of all more than 450 billion euros ($ 529 billion) of loans sold in Europe between 2014 and 2019, about half were bought by Cerberus, Blackstone, Lone Star and Goldman Sachs.
Blackstone and Cerberus did not respond to a request for comment. Goldman Sachs and Lone Star declined to comment.
The ECB scheme, which will be discussed with European Union officials on Friday, is based on the Italian website BlinkS, which links buyers and sellers of loans, as well as debt auctions run by the US federal agency.
If the EU states agree, the new market could come under the jurisdiction of the Single Dispute Resolution Board (SRB), the European Union agency that will liquidate failed banks.
The original message in English is available under the code: [nL8N2GD28B]
(John O'Donnell and Matt Suffham. Translated by Alexey Kuzmin. Editor Dmitry Antonov)