Zombie banks threaten Europe, says Portugal’s regulator

Pushing his desire for a pan-European ‘bad bank’, Governor of the Bank of Portugal Carlos Costa has told a conference in Poland that Europe is being threatened by “zombie banks” – institutions that are technically solvent but cannot increase their credit because of underperforming investments. “We have to break this cycle,” he said, stressing a bad bank could be a guarantee of sovereignty for the European Stability Mechanism.