Banks’ state reps face ax

Kathimerini English - - Focus - YIAN­NIS PAPADOYIANNIS

The state’s rep­re­sen­ta­tives on the gov­ern­ing boards of the coun­try’s sys­temic banks have to re­sign as they do not ful­fill the cri­te­ria of the law the govern­ment in­tro­duced af­ter the 2015 ne­go­ti­a­tions with Greece’s cred­i­tors.

The ap­point­ment of new state rep­re­sen­ta­tives at banks will not be an easy task for the govern­ment, as it will have to select ac­tual bankers with con­sid­er­able bank­ing ex­pe­ri­ence, and not party friends as had been the case to date.

The boards of Na­tional Bank and Pi­raeus Bank no longer have a state rep­re­sen­ta­tive as they have paid off all fund­ing granted to them by the state un­der the 2008 law re­gard­ing as­sis­tance to the credit sec­tor, which had in­tro­duced state rep­re­sen­ta­tion on bank boards.

In fall 2015, amid heroic dec­la­ra­tions about na­tional pride and in­de­pen­dence, the govern­ment passed a law that in­cluded ex­cep­tion­ally strict cri­te­ria for the ap­point­ment of bank board mem­bers, re­flect­ing the deep mis­trust of Greece’s cred­i­tors in lo­cal hu­man cap­i­tal. The law ruled out any state in­volve­ment in banks’ de­ci­sion mak­ing.

There­fore, in the last few months, more than 20 Greek board mem­bers have re­signed from the boards of Na­tional, Al­pha, Pi­raeus and Eurobank and been re­placed by for­eign bankers. The bal­ance in the four boards stands at 26 Greeks against 19 for­eign­ers and is likely to shift fur­ther in fa­vor of non-Greeks. ad­min­is­tra­tion of the Pi­raeus group, led by CEO Chris­tos Me­ga­lou, is ex­pected to up the pace in tack­ling the ma­jor chal­lenges ahead, the first be­ing the re­duc­tion of its non­per­form­ing ex­po­sures (NPEs). Pi­raeus has to re­duce its NPEs from about 34.2 bil­lion to­day to 20.3 bil­lion eu­ros at end-2019.

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