Bank of Greece Governor Yannis Stournaras urged non-performing-loan management companies to exploit an existing regulatory framework and to make a more efficient management of debt.
In an interview with Naftemporiki financial newspaper published Friday, the central banker said that NPLs were out of banks’ balance sheets but this debt was not disappearing.
“For this reason,” he said “it is important that NPL servicers manage the stock of NPLs more efficiently. This means exploiting an out-of-court mechanism for debt settlement and a recent new law on debt settlement and bankruptcy. It is important that servicers offer sustainable solutions to debtors or a more efficient management of collateral – when necessary – to facilitate the return of debtors to the production process.”
He stressed that a successful management of NPLs by servicers is a prerequisite for the success of the Hercules program.
Stournaras noted a significant increase in private-sector deposits, currently exceeding 180 billion euros and returning to March 2011 levels. The stock of NPLs has fallen to 29.4 billion euros from 107 billion in March 2016.
The central banker reiterated his estimate that the country’s GDP will grow by 7.2% or more this year and by around 5% in 2022.