Does it mean "bad loans"?

The plan has several advantages. By forcing banks to recognize losses, it could trigger a much-needed restructuring of Europe’s overcrowded banking sector: Unhealthy banks would have to either raise more capital or shut down. By averting a fire sale into illiquid markets, the plan would limit system-wide losses and make the whole reckoning less painful. The bad bank could even turn a profit for the European governments that provided its capital.

Source: https://www.bloomberg.com/view/articles/2017-03-06/a-bad-bank-could-be-good-for-europe

1 Answer 1


A reckoning is literally a calculation—typically a calculation of the total cost of something purchased, such as the bill you are given at the end of your meal in a restaurant.

In this context, then, the reckoning is the final cost or 'bottom line' of the "huge pile of bad loans that EU banks are sitting on". The author suggests that creation of a "bad bank" would in the final analysis reduce the painful impact of this debt on the system as a whole.


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