⁍ State-backed bad loan manager has gone from bit player to one of the leading forces in Italy’s 330 billion euro bad debt market.

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⁍ Under the leadership of former UniCredit executive Marina Natale,.

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⁍ has also started participating in the sale of debts from healthy lenders.

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⁍ Rival bad loan specialists complain it furthers competition in a sector were profit margins are thinning.

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– The Italian government has stepped in to buy up bad loans that have piled up in the country’s banks—and it’s doing so at a huge expense to taxpayers. The Financial Times reports that the state-backed Banco BPM has bought up more than $390 billion in bad loans since it was created in 2016 by the Italian government to help clean up the country’s banking system after the last financial crisis. Italy is one of the most indebted countries in the world, with a budget deficit of 4.5% of GDP in 2017, according to the International Monetary Fund. The government says it wants to reduce the country’s debt-to-GDP ratio, which stood at 120% in 2016, from its current 120%. But that’s not good enough for some bad-loan specialists, who say the state is crowding out competitors in the market, Reuters reports. Two suitors for Banco BPM said they refused to bid for the loans because they couldn’t beat the state’s offer of between $2 million and $4 million for the loans, and they didn’t want to spend the time and money analyzing the loans. The Italian government says it has bought up more than 33 billion in bad loans over the last three years, but bad-loan specialists say that’s not enough to reduce the country’s debt-to-GDP ratio, which stands at 120%.