ECONOMY

Credit sector clauses retracted via multi-bill

credit-sector-clauses-retracted-via-multi-bill

The government has been forced to cancel provisions included in the law on the recapitalization of banks regarding the assessment process for the managers of banks, in order to secure the approval for the disbursement of the bailout funds by the eurozone.

The omnibus bill tabled late on Tuesday cancels the provision of the recap law that the assessment criteria do not apply to bank board members who have secured approval from the Single Supervisory Mechanism (SSM). That reference was seen to be tailor-made for the president of National Bank, Louka Katseli, as a condition for a positive assessment was that board members should not have held any senior government or party political positions in recent years. Katseli is a former economy minister and was until recently the head of a political party named Social Pact.

However, the changes would not only apply to Katseli. The particularly strict provisions of the law for the assessment of bank board members will lead to massive changes in the managerial posts at local lenders.

The multi-bill also retracts the regulation on deferred tax assets, as it is seen as posing a risk to banks’ capital.