The Bank of Greece’s (BoG) proposal for tackling Greek systemic banks’ NPLs, now calculated at billion euros, will reportedly include the long-expected creation of a “bad bank”, based on a model of asset management firms.
According to recent statements by BoG Gov. Yannis Stournaras, between 40 to 45 billion euros worth of NPLs will be transferred to the envisioned “bad bank” and without the state being burdened, as he claimed.
Based on the plan, monetary losses from the process, namely, transferring the NPLs’ book value instead of their market value, will affect banks’ spreadsheets, and not the Greek state.
He added that participation in the plan is voluntary for the banks, with another enticement being a write-off on taxes slapped on share capital.
