G. Stournaras: The restructuring of the red loans by the servicers will judge the success of HERACLES


The Governor of the Bank of Greece has issued a “call” to the management companies of the red loans (servicers) to take advantage of the institutional framework provided by the State and to carry out a more efficient management of the debt of individuals and companies.

According to Mr. Stournaras in an interview with Naftemporiki, the red loans may have “gone” off banks’ balance sheets, reducing their percentage on discounted loans, but that debt is not going away.

For this reason, as he said, “It is important for the management companies, the NPLs Servicers, to be able to manage as efficiently as possible the stock of MES that they have undertaken. This assumes the use of extrajudicial debt. Settlement mechanism and the provisions of the recent Debt Settlement and Second Chance Law. And it should not be forgotten either that the good management of the MES by the management companies is a prerequisite for the success of the Hercules state guarantees program “”.

As the governor of the BoG pointed out, there is a significant increase in private sector deposits, which exceeded 180 billion euros, having returned to the levels of March 2011. As for red loans: from the maximum amount of ” approximately 107 billion Loans (NPL) had increased in March 2016 – with an NPL ratio on total loans approaching 50% – at the end of June 2021 the amount of NPLs on the balance sheet of credit institutions (on an individual basis) strongly fell to 29.4 billion euros and the MES index to 20.3%.

For the course of the economy, he reiterated that according to the forecasts of the Bank of Greece, in 2021 the GDP is expected to increase by 7.2% or more. Fiscal policy will continue to support the economy in the second half of the year, albeit at a slower pace, with the phasing out of support measures. Financing conditions should remain favorable due to the easing of monetary and financial policies, while the expected contributions from the Next Generation EU (NGEU) fund will give a significant boost to investment.

In 2022, the economic growth rate is expected to be around 5%, provided that it continues to be significantly boosted by international tourism, the recovery of the euro area and the acceleration of investments despite less government support. Finally, the BoG’s forecast for the growth rate of potential product in a decade is close to 2.0%.


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