The pressure being exerted by Greece’s lenders for a radical shakeup of the boards of Greek banks – allowing a new generation of executives to take over so they can lead the banking system into the post-crisis era – is apparent in the latest, and to a great extent surprising, changes in the hierarchy of the Hellenic Financial Stability Fund (HFSF) and Piraeus Bank.
Even though the changes have provoked reactions and complaints about the so-called “dehellenization” of the banks (43 New Democracy MPs submitted a question to Parliament on this subject, while the bank employees’ union, OTOE, threatened legal action) well-informed sources argue that there is another angle that needs to be taken into consideration.
They point out that so far the European Central Bank’s Single Supervisory Mechanism (SSM), as well as other institutions, have met with and evaluated Greeks for the vacant positions at the HFSF and Piraeus. This does not mean that foreign candidates have been ruled out but it does show that they are not the only candidates being considered.
There is, however, concern about the causes that led the Greek banking system to its current state after a period of remarkable growth between 1990 and 2008. After that period, the local lenders faced the challenge of the crisis, which came at a heavy cost.
There are many grievances, for instance over how the crucial issue of nonperforming loans has been handled. Attention has also been drawn to the fact that in some cases companies have gone bankrupt but the owners’ assets have remained intact, as well as to the financing extended to indebted firms.
The institutions’ decision not to allow any businessmen to sit on banks’ boards is an attempt to break links with the past. It is also clear that they do not want to see a mere recycling of past board members.
It appears that creditors would prefer these positions to go to young Greeks with experience in management at major organizations and with expert knowledge of restructuring so they can take the reins and lead the banks into a new era.