Re­cap law to be voted next week

Bank of­fi­cials say the re­sults of the stress tests of the four sys­temic lenders have al­ready been con­firmed

Kathimerini English - - Focus - BY YIAN­NIS PAPADOYIANNIS

The law on the re­cap­i­tal­iza­tion of banks is ex­pected to clear Par­lia­ment by the end of next week, as it was an­nounced af­ter a cabi­net meet­ing yes­ter­day that the bill is ready and will be put up for pub­lic con­sul­ta­tion early next week.

Gov­ern­ment sources said that “the is­sue of the re­cap­i­tal­iza­tion timetable is ex­cep­tion­ally im­por- tant for the gov­ern­ment, as the process will have to be com­pleted soon, and in any case be­fore the end of the year.” The gov­ern­ment’s aim is to make sure that this will be the last re­cap­i­tal­iza­tion process for Greek banks, say­ing in a state­ment that “the con­di­tion for a suc­cess­ful re­cap is its com­bi­na­tion with the man­age­ment of the mat­ter of non­per­form­ing loans, and with rad­i­cal changes to the ad­min­is­tra­tion and op­er­a­tion of banks.”

The timely com­ple­tion of the re­cap­i­tal­iza­tion was also stressed yes­ter­day by the pres­i­dent of the Euro­pean Cen­tral Bank, Mario Draghi, in re­sponse to a ques­tion by a Greek MEP.

He said the full and timely com­ple­tion of the process is the main con­di­tion for the restoration of con­fi­dence in the Greek econ­omy.

Mean­while, bank of­fi­cials say that the re­sults of the stress tests on Greek banks have al­ready been con­firmed, and that it is just a mat­ter of days be­fore they are pub­lished.

Bankers ex­pect to be able to draw the amount of around 5.5 bil­lion eu­ros from the mar­ket that all four sys­temic banks will re­quire be­tween them to avoid be­ing na­tion­al­ized.

They say there is sig­nif­i­cant in­ter­est on the part of in­vestors, but add that the new frame­work for the re­cap process will have to be pre­sented as soon as pos­si­ble.

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The key fac­tors for in­vestors’ par­tic­i­pa­tion con­cern the im­ple­men­ta­tion of the bailout pro­gram with the ap­pli­ca­tion of re­forms, and the way that non­per­form­ing loans will be man­aged – it is vi­tal, bank of­fi­cials say, that this prob­lem is tack­led in a way that does not harm the cap­i­tal base of lenders.

They add that there has been no ma­jor im­pact on the course of NPLs in the last few months from the cap­i­tal con­trols on bad loans.

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