Euro banks facing $283bn writedowns

EUROZONE banks may need to write down another $283bn (£146bn) on bad loans and securities over the next 18 months, the European Central Bank (ECB) said yesterday.

The sum comes on top of an estimated $366bn in writedowns by eurozone banks since the start of the financial crisis in mid-2007, which shows more pain ahead for the banks.

The ECB’s warning, published in its latest Financial Stability Report, pushed the euro below $1.38 against the US dollar as markets worried about further weakness in the 16-nation region.

The report said risks to the financial sector had increased in the last six months amid a deterioration in the economy, which was piling pressure on consumers and firms.