Bad loans force HFSF board change

Kathimerini English - - Focus - YIANNIS PAPADOYIANNIS

Be­sides the changes ex­pected in the ad­min­is­tra­tions of Greek com­mer­cial banks un­der the guid­ance of the coun­try’s cred­i­tors, a ma­jor shakeup is also com­ing to the Hel­lenic Fi­nan­cial Sta­bil­ity Fund (HFSF), as the com­mit­tee charged with as­sess­ing its man­age­ment has called for lead­er­ship changes at the bank bailout fund in or­der for it to re­spond to the de­mands of its role.

Within this con­text, HFSF chair­man Gior­gos Miche­lis, chief ex­ec­u­tive of­fi­cer Aris Xeno­fos, al­ter­nate CEO Gior­gos Kout­sos and Ex­ec­u­tive Com­mit­tee mem­ber Anas­ta­sios Ga­galis were no­ti­fied of the main con­clu­sions of the as­sess­ment process and asked to fa­cil­i­tate re­form in the fund with their de­par­ture.

Sources told Kathimerini that the is­sue of non­per­form­ing loans has long been a bone of con­tention, with the cred­i­tors and the com­mer­cial banks ex­er­cis­ing fierce crit­i­cism against the HFSF. The eu­ro­zone and the In­ter­na­tional Mon­e­tary Fund have put pres­sure on the HFSF man­age­ment to tackle the is­sue of NPLs, but the fund has avoided tak­ing any steps in that di­rec­tion to date.

HFSF sources say that, be­ing a stake­holder in all four main lenders (in some with vot­ing rights and in oth­ers with­out), if the fund were to get ac­tively in­volved in such a cru­cial is­sue re­gard­ing the op­er­a­tion of lo­cal banks, it would rep­re­sent a con­flict of in­ter­est and lead to the cre­ation of gray zones. The bad-loan mat­ter, they stress, must be tack­led by the ad­min­is­tra­tions of the com­mer­cial banks – with pure banking cri­te­ria – and the gov­ern­ment – with the cre­ation of the ap­pro­pri­ate leg­isla­tive frame­work. On the other hand, the cred­i­tors ac­cuse the bank bailout fund not only of re­luc­tance and de­lays on the is­sue of NPLs, but also of a gen­eral at­ti­tude in fa­vor of chang­ing noth­ing, but rather kick­ing the can down the road.

The cred­i­tors also negatively viewed both the gov­ern­ment’s in­ter­ven­tion in the re­place­ment of the pre­vi­ous CEO of the fund, Anas­ta­sia Sakel­lar­iou, and the HFSF’s han­dling – in­clud­ing some non-in­sti­tu­tional ini­tia­tives – of the re­place­ment of the for­mer Pi­raeus Group CEO, An­thi­mos Tho­mopou­los.

HFSF sources counter that the fund suc­cess­fully man­aged the bank re­cap­i­tal­iza­tion in a very de­mand­ing en­vi­ron­ment.

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