New wave of bank chiefs is sought

Kathimerini English - - Focus - BY YIAN­NIS PAPADOYIANNIS

The pres­sure be­ing ex­erted by Greece’s lenders for a rad­i­cal shakeup of the boards of Greek banks – al­low­ing a new gen­er­a­tion of ex­ec­u­tives to take over so they can lead the bank­ing sys­tem into the postcri­sis era – is ap­par­ent in the lat­est, and to a great ex­tent sur­pris­ing, changes in the hi­er­ar­chy of the Hel­lenic Fi­nan­cial Sta­bil­ity Fund (HFSF) and Pi­raeus Bank.

Even though the changes have pro­voked re­ac­tions and com­plaints about the so-called “de­hel­l­eniza­tion” of the banks (43 New Democ­racy MPs sub­mit­ted a ques­tion to Par­lia­ment on this sub­ject, while the bank em­ploy­ees’ union, OTOE, threat­ened le­gal ac­tion) well-in­formed sources ar­gue that there is an­other an­gle that needs to be taken into con­sid­er­a­tion.

They point out that so far the Euro­pean Cen­tral Bank’s Sin­gle Su­per­vi­sory Mech­a­nism (SSM), as well as other in­sti­tu­tions, have met with and eval­u­ated Greeks for the va­cant po­si­tions at the HFSF and Pi­raeus. This does not mean that for­eign can­di­dates have been ruled out but it does show that they are not the only can­di­dates be­ing con­sid­ered.

There is, how­ever, con­cern about the causes that led the Greek bank­ing sys­tem to its cur­rent state af­ter a pe­riod of re­mark­able growth be­tween 1990 and 2008. Af­ter that pe­riod, the lo­cal lenders faced the chal­lenge of the cri­sis, which came at a heavy cost.

There are many griev­ances, for in­stance over how the cru­cial is­sue of non­per­form­ing loans has been han­dled. At­ten­tion has also been drawn to the fact that in some cases com­pa­nies have gone bank­rupt but the own­ers’ as­sets have re­mained in­tact, as well as to the fi­nanc­ing ex­tended to in­debted firms.

The in­sti­tu­tions’ de­ci­sion not to al­low any busi­ness­men to sit on banks’ boards is an at­tempt to break links with the past. It is also clear that they do not want to see a mere re­cy­cling of past board mem­bers.

It ap­pears that cred­i­tors would pre­fer these po­si­tions to go to young Greeks with ex­pe­ri­ence in man­age­ment at ma­jor or­ga­ni­za­tions and with ex­pert knowl­edge of re­struc­tur­ing so they can take the reins and lead the banks into a new era.

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