BoG: Five steps to tackle NPLs

HFSF says its top pri­or­ity is to fa­cil­i­tate and con­trib­ute to the ef­fort to con­tain mount­ing pile of bad loans

Kathimerini English - - Focus - BY YIAN­NIS PAPADOYIANNIS

The gov­ern­ment will have to im­ple­ment five ad­di­tional ac­tions to­ward tack­ling non­per­form­ing loans (NPLs), ac­cord­ing to a Bank of Greece re­port, while the bank bailout fund chief stressed yes­ter­day that the HFSF’s top pri­or­ity is to con­trib­ute to a res­o­lu­tion of this is­sue.

Ac­cord­ing to the cen­tral bank, a so­lu­tion should in­clude a num­ber of in­ter­ven­tions in the com­ing pe­riod for the han­dling of a bad loan pile amount­ing to over 100 bil­lion eu­ros, de­scribed as the big­gest chal­lenge fac­ing banks to­day.

The five steps rec­om­mended are, firstly, the re­form of the frame­work for the ex­tra-ju­di­cial set­tle­ment of debts, so as to al­low for rapid, ef­fec­tive and trans­par­ent set­tle­ment of ar­rears to pri- vate par­ties and to state en­ti­ties.

The sec­ond con­cerns the im­prove­ment of the in­fra­struc­tures and the spe­cial­ized know-how of the ju­di­cial sys­tem. The third is about the sup­ply of fi­nan­cial train­ing and con­sult­ing to overindebted house­holds and the self-em­ployed.

The fourth step pro­vides for the res­o­lu­tion of long-stand­ing is­sues re­lated to the tax han­dling of write-offs and pro­vi­sions both for bor­row­ers and for cred­i­tors.

Lastly, the cen­tral bank rec­om­mends the in­tro­duc­tion of clauses that will en­sure the co­op­er­a­tion of share­hold­ers in the ef­forts of banks for the stream­lin­ing of en­ter­prises.

The BoG warned this week that im­me­di­ate ac­tion must be taken, pre­dom­i­nantly by the gov­ern­ment, to tackle the NPL prob­lem as any more time lost will prob­a­bly have a dra­matic im­pact on the +1.1113 real econ­omy, jeop­ar­diz­ing ef­forts to re­turn it to the path of growth.

Gior­gos Miche­lis, the pres­i­dent of the Hel­lenic Fi­nan­cial Sta­bil­ity Fund, said on the oc­ca­sion of the publi­ca­tion of the en­tity’s an­nual fi­nan­cial re­port for 2015 that in the next few months the fund in­tends to fa­cil­i­tate and pro­mote a so­lu­tion to the NPL prob­lem, in the con­text of its man­date to pre­serve the sta­bil­ity of the lo­cal credit sys­tem.

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