Stournaras: EU should help banks by easing state aid rules

Europe should ease state aid rules and protect bank deposits to shore up lenders struggling under the weight of the coronavirus pandemic, European Central Bank policymaker Yannis Stournaras said in an opinion piece on Friday. 

Eurozone banks have suffered from low profitability and exceptionally low valuations for years, leading to concern that the inevitable surge in nonperforming loans amid a pandemic-led recession would create a systemic risk.

"In exceptional cases, I support the introduction of a more flexible stance on state aid," Stournaras, Greece's central bank governor, said in a piece for German newspaper Handelsblatt.

He made the case for state-guaranteed asset management companies, more commonly known as bad banks, with "appropriate remuneration of the state" to help lenders get rid of soured loans.

He also argued that all...