Brussels and Berlin have warned that unless the Greek banks take initiatives to address the management on non-performing loans, they will not fund any recapitalization efforts. As such, Greek banks may be faced with a bail in, in accordance with European directives. This means that the bank recapitalization will be carried out by shareholders, bondholders and uninsured deposits.
Although the management of NPLs is a critical issue in the second bailout program review, essential legislative initiatives – such as out-of-court settlements and offering legal protection to bank officers involved in the restructuring of troubled businesses – have yet to be implemented.
Even in areas where such initiatives have been carried out – such as the foreclosure of homes – the law is not necessarily implemented. These developments result in the banks being unable to effectively distinguish between strategic “bad debtors” and those genuinely unable to fulfill their obligations.
Read more here.
RELATED TOPICS: Greece, Greek tourism news, Tourism in Greece, Greek islands, Hotels in Greece, Travel to Greece, Greek destinations , Greek travel market, Greek tourism statistics, Greek tourism report
