By A. Doga
[email protected]
A pressing need to better manage Greek banks' "bad loan" portfolios dominated the contacts that the chairwoman of the European Central Bank's (ECB) supervisory board, and the unofficial head of the latter's Single Supervisory Mechanism (SSM), had on Tuesday in Athens.
Danièle Nouy focused on the matter during successive meetings with Bank of Greece (BoG) Gov. Yannis Stournaras and the leadership of the Hellenic Banks Association, which represents the crisis-battered banking sector in the country.
Nouy said agreed to targets for reducing non-performing loans (NPLs) and non-performing exposures (NPEs) must be met, while pressing banks and the leftist Greek government over the need to finally draft, ratify and implement legal revisions that allow for a more flexible management of "bad debt".
Conversely, she said Greek banks -- which still operate under capital controls -- have taken decisive steps towards dealing with NPEs, expressing optimism that a looming new legal framework will further contribute to the "challenge". She added that the situation concerning Greek banks has distinctly improved over the past two years, especially in terms of memorandum-mandated corporate governance standards and capital adequacy.
During a meeting with Stournaras, the SSM chief was reportedly briefed in detail over the situation in the domestic banking sector, including NPLs, liquidity, corporate governance and other regulatory issues.
