Banks and international investors convene at the Bank of Greece to take stock of the framework for resolution of non-performing loans
10/03/2016 - Press Releases
About 200 representatives of the Greek financial industry, foreign investors and advisors met today at the Bank of Greece to take stock of the progress in the resolution of non-performing exposures (NPEs).
The goal of the conference, which was jointly organised by the Bank of Greece and the European Bank for Reconstruction and Development (EBRD), was to discuss the emerging supervisory and institutional framework and explore solutions for NPEs.
At 43.6 per cent of total exposures, loan delinquency is preventing the financial system from providing fresh funds for working capital and investment for the benefit of the real economy.
Nick Tesseyman, EBRD Managing Director for Financial Institutions, said: “EBRD supported the successful recapitalisation of the four significant Greek banks last November. Today’s event offers an opportunity to discuss in depth the defining challenge in reviving the country’s corporate sector through concerted efforts to resolve the country’s NPL challenge.”
Theodoros Mitrakos, Deputy Governor of the Bank of Greece, highlighted that a framework for the rigorous management of NPEs is now in place:
• the supervisory requirements for NPE management have been enhanced, and the banks have already implemented most of the necessary organizational and operational changes;
• a Code of Conduct guides banks in their interaction with borrowers in arrears;
• the segmentation of the banks’ NPE portfolio and their capacity to handle the various NPE types has been assessed;
• the framework for the licencing and operation of specialist firms regarding the servicing or acquisition of delinquent loans has been established;
• the Bank of Greece, in cooperation with the ECB Banking Supervision and the Greek banks, is setting NPE operational targets, that will be monitored on a regular basis.
With these first elements in place, participants acknowledged that NPE resolution can now gain momentum.
The conference addressed three key areas:
• Solutions for borrowers with exposures to multiple banks
• Conditions for the development of a secondary NPL servicing and sales market
• The banks’ workout processes to tackle the large number of delinquent SMEs
The speech by the Bank of Greece Deputy Governor Theodoros Mitrakos and all conference material will be made available on the Bank of Greece website.
Bank of Greece: Communication Department, firstname.lastname@example.org, Tel. +30 210 320 3446-8
EBRD: Anthony Williams, email@example.com, Tel. +44 207338 7805