BoG: Credit by nat­u­ral se­lec­tion

Provopou­los calls on lo­cal bankers to fund the ro­bust en­ter­prises and let the weak com­pa­nies die out

Kathimerini English - - Front Page - BY YIAN­NIS PAPADOYIANNIS

Bank of Greece Gov­er­nor Gior­gos Provopou­los called on the coun­try’s com­mer­cial lenders to stop fund­ing mori­bund com­pa­nies and fo­cus on more ro­bust cor­po­ra­tions that can help the econ­omy grow.

Ad­dress­ing an event or­ga­nized by the Hel­lenic Fed­er­a­tion of En­ter­prises (SEV) yes­ter­day, the cen­tral banker said: “The con­di­tions of plen­ti­ful and of­ten flex­i­ble bank fund­ing can­not and should not be re­peated. It would be point­less and dan­ger­ous to al­low per­ma­nently weak, un­der­cap­i­tal­ized and overindebted en­ter­prises to con­tinue op­er­at­ing. New credit should be ex­tended to dy­namic en­ter­prises with a highly ex­port-ori­ented char­ac­ter and with growth prospects.”

Provopou­los fur­ther called on lenders to take ini­tia­tives for the re­struc­tur­ing of the coun­try’s econ- omy: “The bank­ing sys­tem can con­sti­tute an im­por­tant tran­si­tion lever to­ward the new growth model that the econ­omy is in need of.”

“Nowa­days the credit sec­tor may be the only part of the econ­omy that has been fully re­struc­tured and re­cap­i­tal­ized. The new bank­ing sys­tem is now based on firmer ground. No other do­main has seen re­struc­tur­ing on such a scale, or even close, even though the un­prece­dented con­di­tions de­manded it. This expe- ri­ence of banks may prove pre­cious also for the en­ter­prises in the other sec­tors and do­mains of our econ­omy. Banks are there­fore in­vited to con­trib­ute sub­stan­tially to the ef­fort to re­or­ga­nize pro­duc­tion,” said Provopou­los.

Like­wise, Pi­raeus Bank head Michalis Sal­las stressed that help­ing any non-com­pet­i­tive en­ter­prises to sur­vive un­der­mines the in­ter­ests of the econ­omy. The pres­i­dent of the coun­try’s big­gest lender said that the ef­forts to re­struc­ture the econ­omy can­not pos­si­bly be re­stricted only to state in­ter­ven­tions, adding that the re­spon­si­bil­ity for the re­struc­tur­ing and mod­ern­iza­tion of the pro­duc­tion base mainly lies with pri­vate ini­tia­tives. The chief ex­ec­u­tive of Pi­raeus group sub­sidiary Geniki Bank, Niko­laos Karamouzis, echoed Sal­las, say­ing that banks should grad­u­ally fo­cus on the man­age­ment of tomorrow and not on that of yes­ter­day.

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