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BoG Provopoulos: Greek banking system “is standing on a solid foundation”

The issue of non-performing loans to enterprises and households must he resolved in a systematic way, Bank of Greece governor George Provopoulos said on Wednesday.

According to AMNA, addressing a seminar organized by the Federation of Hellenic Enterprises (SEV), the central banker said that the accumulation of bad debts –that have surpassed 30 pct – was one of the causes for a limited approval of loans by Greek banks.

He predicted that in the short-term the prospects of credit expansion will remain limited. Commenting on the revelations of a judicial investigation of bad loans offered by Hellenic Postbank, Provopoulos emphasized that “the conditions of ample and often flexible bank lending cannot and will not be repeated”.

He assured those present that the country’s banking system, following its recapitalisation and despite losing savings of around 90 billion euros from 2009 to 2012, “is standing on a solid foundation,” adding that no other sector has witnessed a restructuring on such scale.

Provopoulos warned, however, that banks’ policies from now on must be based on a new framework of credit and risk management.

Banks must avoid trends prevailing in the decade before the crisis, when a large part of credit was distributed to mortgage loans and consumption.

The central banker underlined the need for new credits to be distributed to dynamic enterprises, with a high grade of export activity and growth prospects. (via capital.gr)

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