ECB has asked banks to fully cover impaired loans by around 2026 -paper

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MILAN - The European Central Bank has asked lenders it oversees to put aside more money to fully cover their impaired loans by around 2026, Italian newspaperIl Sole 24 Ore reported on Tuesday citing a source.

The report focused in particular on Italian banks, saying the country's lenders were burdened by the highest amount of impaired loans in Europe.

The banks would not have to comply with the regulator's request if they were able to explain why they cannot, the paper said.

On Monday shares in Italian troubled lender Monte dei Paschi di Siena fell more than 10 percent after it said the ECB had told to increase cover for impairedloans by 2026.

A request to apply the rule to existing loans was unexpected, analysts said on Monday.

(Reporting by Francesca Landini; editing by Kim Coghill and John Stonestreet)