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Banks considering ways to shift troubled loans off balance sheets as ECB pressure mounts

Ireland’s main banks are considering new ways to shift loans in trouble off their balance sheets as they face mounting pressure from the European Central Bank to deal with trickier mortgages almost a decade after the financial crisis began.

Some of the banks are weighing setting up special purpose vehicles (SPVs) that would house bundles of non-performing loans (NPLs), according to sources. They would need to sell a majority stake in the vehicles to outside investors, possibly including overseas private equity firms, to be able to reclassify the loans as no longer being on their books.

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