Why a European bad bank may not be the right answer

In recent weeks, there has been much talk of setting up a European bad bank to manage the growing non-performing loans in the banking sector resulting from the Covid-19 outbreak. Is this idea legally feasible and financially sound?

First, we should note that the eurozone banking union already has the option to set up a multilateral bad bank, meaning that the key decisions are taken by a European supranational authority with the possibility of European funding. This option is contained in the