Regulators Weigh Measures to Give Europe’s Banks Bad Loan Relief

European regulators are considering giving the continent’s banks more time before they have to set aside billions of euros for bad loans.

That option is one of several measures regulators are discussing to soften the blow from new accounting standards and avoid ripping a hole in the balance sheets of banks, according to people familiar with the matter.

A spokeswoman for the European Central Bank, which oversees banks in the euro area, declined to comment.

Giving banks more time to provision for bad loans would be another key piece in the unprecedented measures governments have taken to avoid that the ...