By E. Sakellari
[email protected]
Guarantees worth five billion euros may be sufficient to slice off up to 15 billion euros of "bad debt" burdening the balance sheets of Greece's four systemic banks, according to Dr. Martin Czurda, the CEO of the Hellenic Financial Stability Fund (HFSF).
The HFSF is a creditor-mandated special purpose vehicle established in 2010 to stabilizing the ravaged Greek banking sector in the wake of the state-debt crisis and subsequent economic recession.
Czurda said the hypothesis by HFSF, namely, that ratio of NPLs of under 10 percent is necessary for Greek lenders to gain become competitive and return to viable growth.
He also stressed the need for deleveraging of balance sheets, a rationalization of operating costs and a transformation, as he said, of Greek banks' business models, as necessary conditions for the latter to re-access capital markets.
The veteran banking executive added that the thrice bailed-out systemic banks much find a balance between credit expansion and the risk of creating more "bad debt". He also emphasized that conditions for gauging risks will not be loosened.
