The head of the ECB’s supervisory board, Danièle Nouy, this week emphasized that whatever measures to manage and begin reducing the Olympus-sized mountain of non-performing loans (NPLs) in Greece does not have to commence with foreclosures and auctions of debtors’ primary residences.
Nouy’s high-profile statement is apparently indicative of how the Single Supervisory Mechanism (SSM) wants to tackle the specter of NPLs both in Greece, where it is a priority, as well as in the Euro area.
In a reply to Greek MEP Eva Kaili, Nouy said the SSM is ready to accept the extension of legal protection against creditors for a debtor’s primary residence beyond 2017. She also reminded that the problem of NPLs is very significant in Greece (above 100 billion euros), but is primarily comprised of business and corporate loans.
The ECB executive said when issues reach the level of individual citizens, “things are different”, while adding that the SSM has assigned a task force the issue of drafting directions to deal with NPLs.
A report by the task force is expected within the month, with its recommendations expected to form a “road map” for the issue.
