ECONOMY

Creditors to demand a say on bad loans

Greece’s creditors are demanding a say in the administration of the local credit system and particularly the day-to-day management of nonperforming loans in the country, promoting the need for a joint agreement to resolve the problem of bad loans.

Such a development however might create more problems than it solves, as domestic bank officials stress the creditors’ ignorance of the country’s conditions, which has been illustrated on a number of occasions. One of these was the off-target property value reports by their technical experts which forced Greek banks to make a lengthy reassessment of their mortgage portfolios.

Local banks are keen to avoid any such interference by the troika in decision-making regarding the management of bad loan portfolios and provisions, but it remains unclear what will eventually happen as the creditors have managed to curb such reactions in the past.

This is one of the thorny issues expected to come up in negotiations between the creditors’ representatives and the government in the coming days.