The Italian government is to implement a two-year programme which will replace the Garanzia sulla Cartolarizzazione delle Sofferenze (GACS) scheme in order to help the banks shift their €200bn stock of non-performing loans (NPLs) off balance sheet. In a surprise, however, the new version of the scheme will not include language to incorporate unlikely-to-pay (UTP) loans.
The original GACS programme ran until March 6, but NPL securitization continued with the expectation of a GACS renewal. The market widely expected, however, that the new scheme would be amended to incorporate loans classified as UTP, but the new terms are reported to be stricter than those
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