Wanted: a chief executive to run Greece's bank-rescue fund. Job description: work hard and pray for a miracle.
Greece has failed to find a boss for its Hellenic Financial Stability Fund since July, when its three-member executive team resigned. A new CEO, offered the job in late October quit a week later. His predecessor, an interim boss, had lasted two months.
The fund, financed by eurozone and International Monetary Fund loans, has not explained its failure to find a new leader, but a source close to the recruitment process said the role was challenging and "less enticing than initially thought."
Former fund executives describe it as one of the most thankless jobs in banking. One called it a "poisoned chalice."
The failure to find a new CEO means the fund lacks a strong leader to push banks to make painful reforms, such as tackling bad loans. Their huge burden of bad debt, totaling 106 billion euros ($113 billion) or about half of all loans, inhibits them from providing credit to the shattered economy's vibrant firms.
The CEO's role is to use the fund's leverage as a major investor in three of Greece's four major listed banks to help push through banking reforms designed by the European Union, the European Central Bank and IMF and to eventually divest its stakes, returning banks to private hands.
The job now comes with an annual salary of up to 270,000 euros ($290,000), perhaps low by the international standards of senior bank executives, but higher than two years ago when then-finance minister Yannis Varoufakis capped it at 132,000 euros.
Moreover, the boss has to answer to several masters who are currently at loggerheads over the broader question of Greek reforms.
The government, the central bank, the EU, ECB and European Stability Mechanism are all represented on a six-member selection panel, set up in 2010, to recruit fund executives.
Athens and its key lenders are in disagreement over the terms of the latest bailout. If a resolution cannot be found by July, Greece again may face insolvency.
"At times you are the slave of 20 masters," a former fund executive said, adding that it was no job for a hard-driving chief executive accustomed to pushing through obstacles. The fund executives who discussed the job with Reuters declined to be identified.
The selection panel has been trying to recruit a CEO to run the HFSF since the fund's previous three-member executive team was removed in an effort to beef up leadership, which in turn was a condition of Greece's third bailout deal with its lenders.
The source close to the selection process said the panel had studied more than 70 resumes in its latest search, which began in late December, but no suitable candidate emerged. The fund kicked off yet another search last week, advertising the job.
Efforts to "give the fund a stronger role through new executive leadership proved more challenging" than envisaged, the source said of the difficulty in filling the vacancy.
Praying for a miracle
The Hellenic Financial Stability Fund employs just 32 people and has total assets of around 8 billion euros, including 375 million euros in cash, based on September 30 balance sheet data.
It owns 40 percent of National Bank, 26.2 percent of Piraeus Bank and 11 percent of Alpha Bank, as well as a 2.4 percent holding in Eurobank.
However, the fund has lost about two-thirds of its original 25 billion euros investment, money Greece had borrowed from the EU and IMF, part of a mountain of debts for which Athens is now keen to get relief in negotiations with its official lenders.
The fund pumped the cash into banks in 2013 after an overhaul of Greek debt had forced them to slash the value of their government bond holdings. Later, they needed to raise more capital, dramatically reducing the value of the fund's stakes.
The HFSF once hoped to recoup the money, just as Washington did from its bank bailouts in the 2008-2009 financial crisis.
Private investors who took part in the Greek bank rescues were given "call warrants" as sweeteners, allowing them to buy bank shares from the fund. That would have given the CEO of the fund an easy way to win back its 25 billion euros of investment.
But the instruments are well out-of-the-money and due to expire by year-end. In the case of National Bank, the warrants, exercizable in June and December, carry strike prices of 78.5 and 81.1 euros. The bank's shares trade at just 0.23 euros.
Instead, the new CEO is probably going to have to hang on to the stakes and claw back whatever can be recovered of the state's investment the hard way, by pushing the banks to reform their way back to profitability.
"It's safe to assume the warrants will expire worthless," said analyst Nick Koskoletos at Athens-based Eurobank. "The HFSF has lost any chance of recouping the 25 billion euros, given the dilutions in the two rounds of recapitalization that followed. The sum will remain a part of public debt."