OPINION

Loans law damaging our banks

Greece’s banks are having a hard time at present, as it is they that have to pay a hefty price for the country’s tarnished credibility. Some of these credit institutions do in fact have a dubious record. Nevertheless, a strong banking sector is crucial for the growth and competitiveness of the economy of this country. Conditions have become much tougher for banks since the passing of legislation on the regulation of debts that gives much more lenient terms of borrowing to the hundreds of thousands of households that are having difficulty repaying the loans they have taken out. This legislation has endangered the ability of the banks to securitize loans and therefore access funds. Yielding to populist instincts, Greece’s lawmakers decided to turn a deaf ear to strong recommendations by European Union officials and other experts. Now that the liquidity crisis is a real threat, Premier George Papandreou’s socialist government and the political parties that voted in the law should consider its suspension or revision.