Eurozone banks to get more time to cover bad loans as ECB eases rules

Banks in the eurozone will get more time to set aside cash to cover for loans that have gone or will go unpaid after the European Central Bank bowed to pressure from Brussels to ease its rules on the matter.

Banks will now have three years to set aside cash against a bad loan if it is unsecured, nine years if it is backed by real estate, and seven years for other types of collateral, the ECB said, in line with a timeframe set by regulation approved by the EU Parliament in April.

The move by the ECB's new chief supervisor, Andrea Enria, ends a two-year dispute between Frankfurt and Brussels on an issue once worth a trillion euros in soured credit - for the most part a legacy of the last recession.

The ECB's previous, more stringent timeframe had led to an angry backlash from banks and lawmakers, particularly from Italy.

Still, ECB supervisors reserved the...