The changes agreed by Athens and its creditors to the legal framework on tackling nonperforming loans (NPLs) will lead to the immediate licensing of 10 NPL management firms. Bank sources also estimate that the simplification of the process will serve to attract more interested companies from Greece and abroad that have hitherto stayed away due to the complicated regulations.
The framework for the creation of NPL management companies had been drafted in such a way as “to avert the creation of such firms,” as one source put it, as the process imposed by the government had made it easier to obtain a permit to open a new bank than to create a bad-loan management firm.
Since late 2015, when the framework was introduced, just four such companies have been licensed, including two that got the green light in the last few weeks and a third in late 2016. It was the inefficiency of the framework that led the Bank of Greece to hire an external, independent consultant for the assessment of the regulatory framework.
The changes now agreed will dissociate the licensing of NPL managing companies from the criteria for the granting of a banking license.