September 19, 2016 / 5:47 PM / 2 years ago

Europe's regulators must tell banks to cut bad debts to help recovery: ECB

Yves Mersch, Member of the Executive Board of the European Central Bank presents an oversized newly unveiled 10 euro note at the headquarters of the European Central Bank (ECB) in Frankfurt, January 13, 2014. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) - European regulators must tell banks to cut their bad debts as they are holding back the euro zone’s recovery, ECB Executive Board member Yves Mersch said on Monday.

“We cannot afford to waste too much time,” he said.

“High levels of non-performing loans are paralyzing banks, preventing them from passing on the ECB’s monetary stimulus to companies and households, and effectively holding back the recovery in the euro area.”

“We have to be realistic though; improvements will not happen overnight,” Mersch said. “It will take years. We have to be patient – and determined.”

Reporting by Balazs Koranyi; Editing by Louise Ireland

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