Cred­i­tors to de­mand a say on bad loans

Kathimerini English - - Focus - GIOR­GOS MANTELAS

Greece’s cred­i­tors are de­mand­ing a say in the ad­min­is­tra­tion of the lo­cal credit sys­tem and par­tic­u­larly the day-to-day man­age­ment of non­per­form­ing loans in the coun­try, pro­mot­ing the need for a joint agree­ment to re­solve the prob­lem of bad loans.

Such a de­vel­op­ment how­ever might cre­ate more prob­lems than it solves, as do­mes­tic bank of­fi­cials stress the cred­i­tors’ ig­no­rance of the coun­try’s con­di­tions, which has been il­lus­trated on a num­ber of oc­ca­sions. One of th­ese was the off-tar­get prop­erty value re­ports by their tech­ni­cal ex­perts which forced Greek banks to make a lengthy re­assess­ment of their mort­gage port­fo­lios.

Lo­cal banks are keen to avoid any such in­ter­fer­ence by the troika in decision-mak­ing re­gard­ing the man­age­ment of bad loan port­fo­lios and pro­vi­sions, but it re­mains un­clear what will even­tu­ally hap­pen as the cred­i­tors have man­aged to curb such re­ac­tions in the past.

This is one of the thorny is­sues ex­pected to come up in ne­go­ti­a­tions be­tween the cred­i­tors’ rep­re­sen­ta­tives and the gov­ern­ment in the com­ing days.

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