The head of the Hellenic Bank Association on Thursday reiterated that allowing Greece’s banks to sell or cede the management of non-performing loans (NPLs) to third parties is a major factor in successfully dealing with the acute problem.
Louka Katseli, who also currently serves as the chairman of the board of the National Bank of Greece, the largest credit institution in the country, cited another three factors to successfully tackle the Olympus-sized “mountain” of debt from NPLs piling up on Greek banks’ balance sheets. She particularly singled out business and corporate NPLs.
Dealing with the increasingly severe problem is a recurring demand by Greece’s institutional creditors, with NPLs currently exceeding 110 billion euros.
Nevertheless, the Tsipras government has been weary of liberalizing the framework to allow funds, including foreign distress funds, the opportunity to purchase and manage NPLs.
Katseli, a former minister in several socialist Greek governments, called for a harmonization of incentives in order to allow banks and the holders NPLs to find mutually acceptable compromises. She also proposed “innovative restructuring” products for loan holders and reforms in Greece’s bankruptcy code.
Katseli spoke in Thessaloniki at a banquet hosted by the bank for northern Greece’s business leaders.
