ECB reportedly pressing Athens for action on massive NPLs problem

The current state and prospects for the crisis-battered Greek banking system was, as expected, as the center of talks in Frankfurt on Thursday between Danièle Nouy, who chairs the ECB’s supervisory board, and visiting Greek Finance Minister Euclid Tsakalotos.

The one-and-a-half-hour meeting also reportedly focused on the still acute issue of non-performing loans (NPLs) held by Greece’s four systemic banks, something that European creditors have repeatedly pressed the leftist Greek government to address.

Managing the Olympus-sized “mountain” of NPLs debt in the country, now exceeding 100 billion euros, is a memorandum-mandated provision, with specific measures requested by creditors even before the third bailout emerged.

According to reports, the ECB’s Single Supervisory Mechanism (SSM) and Nouy herself are pressing for an overall framework to deal with the massive problem, especially an out-of-court arbitration process for NPLs held by businesses and legal entities. This prospective framework would ostensibly be expanded to deal with arrears to the state and pension funds.

On its part, the Tsipras government appears to have promised creditors a fast-track process for judicial approval of loan restructuring plans, as well as faster liquidation procedures in cases where no agreement is reached, or when a business and legal entity are judged as financially unsustainable.

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